THE REGULATION OF CRYPTOCURRENCIES AND THEIR USE IN FACILITATING CRIME: A CRITICAL ANALYSIS OF THE NIGERIAN EXPERIENCE

Abstract

The burgeoning phenomenon of cryptocurrencies has precipitated a paradigmatic shift in the global financial landscape, fostering unprecedented opportunities for innovation and economic growth. However, the opaque and decentralized nature of cryptocurrencies has also created a fertile terrain for illicit activities, including money laundering, terrorism financing, and cybercrime. Nigeria, with its burgeoning cryptocurrency market, is increasingly vulnerable to these risks, necessitating a nuanced examination of the regulatory framework governing cryptocurrencies in the country. A critical review of the extant literature reveals a lacuna in scholarly research on the Nigerian experience, particularly with regard to the efficacy of the regulatory framework in preventing cryptocurrency-related crime. This study seeks to bridge this knowledge gap by undertaking a comprehensive and critical analysis of the regulation of cryptocurrencies in Nigeria, with a specific focus on their role in facilitating crime. Employing a doctrinal research methodology, this study conducts an exhaustive examination of relevant laws, policies, judicial decisions, and regulatory guidelines in Nigeria. The analysis is situated within the broader context of international best practices and comparative regulatory frameworks, providing a nuanced understanding of the strengths and weaknesses of the Nigerian regulatory framework. The findings of this study reveal a fragmented and inadequate regulatory landscape, characterized by a lack of clarity on the legal status of cryptocurrencies, insufficient enforcement mechanisms, and a dearth of effective anti-money laundering and combating the financing of terrorism (AML/CFT) measures. These deficiencies have created an environment conducive to cryptocurrency-related crime, with far-reaching implications for financial stability, national security, and economic development. This study concludes that the current regulatory framework is insufficient to address the challenges posed by cryptocurrency-related crime in Nigeria. To mitigate these risks, the study recommends the development of a comprehensive and harmonized regulatory framework, predicated on international best practices and tailored to the unique circumstances of the Nigerian cryptocurrency market. Additionally, the study advocates for enhanced international cooperation, improved AML/CFT measures, and increased enforcement capabilities to effectively combat cryptocurrency-related crime in Nigeria.