Experts call for lawyers’ involvement in digital assets | The Guardian Nigeria News

Experts have called on legal professionals to get involved in digital assets to quell fraud and shed light on the sector.

The call was launched during the Legal Business Conference 2022, on the theme: “Regulating Blockchain and Fintech Innovations: Finding the Balance” organized by Legal Business Network (LBN) in Lagos.

The Chief Executive Officer (CEO) of the Global Digital Assets and Cryptocurrency Association, Gabrielle Kusz, called for transparency in terms of regulatory participation.

She emphasized the need to strike a balance between regulation and development to attract resilience and global competitiveness.

Conference organizer Ifeoma Ben said the recent CBN unveiling of eNaira revealed many legal issues and the opportunities inherent in the blockchain and fintech ecosystem.

She said technology is the future, adding that there is a need for regulators to strike a balance between regulation and innovation, hence the theme of the conference.

Ben noted that the advent of technology has revolutionized the way lawyers sell legal services, while adding that lawyers need to keep up with technological changes that impact the practice of law.

She pointed out that there are opportunities for lawyers in the blockchain space. It is therefore necessary for lawyers to acquire the necessary skills to create legal solutions for their clients in the technological field.

Managing Director (CEO), Kumo Africa, Abikure Tega noted that one way to regulate digital assets is to have an open mind, as one cannot regulate what he has no role in, and have an understanding of what space is. in regards to.

The President of the Blockchain Technology Association of Nigeria (SIBAN), Senator Ihenyen, has emphasized the need for regulation to prevent fraudulent activities with digital assets.

He noted that in 2017, the CBN disclosed that there was a lot of risk involved in the cryptocurrency space, but wanted all banks to drive Know Your Customer (KYC) through compliance. and transaction monitoring, adding that in 2021 apex bank changed this policy.

He urged banks and other financial institutions to conduct more KYC processes and procedures for each person who transacts in crypto using their bank accounts, to have their data, from Binance, guide and aggregate because “it brings a level of transparency and traceability”.

He explained that the Financial Action Task Force (FATF), which is the global body, had already rated Nigeria poorly in terms of compliance with global standards in the areas of money laundering and combating the financing of terrorism (CFT) in August 2021. .

Ihenyen revealed that the global body concluded that the country does not have an adequate or effective mechanism to counter money laundering and financial terrorism in the financial services and virtual assets sectors and in other sectors.

He hinted that the Securities and Exchange Commission (SEC) issued a regulation to ensure that virtual asset providers are registered and licensed to ensure that they are AML/KYC compliance mechanisms.

“There is a new law on money laundering, which was published recently. It’s all happening so fast because the FATF has given Nigeria until October 2022, to make sure it meets global standards otherwise Nigeria will end up in the gray list.

“The gray list is a list where you find countries that have been poorly rated in terms of KYC, countries that are suspected of aiding or financing terrorism. So what we’re saying is we need to involve all stakeholders, now is not the time to say one regulator has all the answers. Now is the time to ensure that Nigeria has a safe and sound financial system, but it also has an inclusive financial system that ensures that players and innovators play in this space.

“It is important to note that virtual assets such as bitcoin can be used by bad actors to conduct illicit transactions. there is no doubt. The question is how do you approach these issues where people are using virtual assets to make these transactions? We should examine what is the role of the CBN to ensure that the financial and banking systems are not used as a corridor to perpetuate these acts.

“It should be noted here that the CBN responded in February 2021 saying that we must block or stop all cryptocurrency transactions in the banking and financial systems as a whole, this is the temporary solution that the CBN has provided . Over the past year, how has this solution ensured that this issue was nipped in the bud?

“If you check all the facts and data, you will realize that since this statement was made, there has been more adaptation of bitcoin and other cryptocurrencies by Nigerians and non-Nigerians alike,” did he declare.

Blockchain Nigeria User Group (BNUG) Founder, Chuta Chimezie, while calling for greater involvement of lawyers in digital assets, pointed out that technology is changing and scalability is a concern in the blockchain space.

“Scalability is a concern among blockchain technologies. The speed is there, but because it has to deal with a decentralized system, it causes delays. To solve the scalability problem, you create also another problem. You sacrifice total decentralization for speed,” he said.

He noted that investment scams thrive because of the policies available.

“Punishing people involved in a scam is not effective. They are fined one million naira regardless of whether they defrauded people,” he said.

Sylvia B. Polson