Author – Sam Reeds – UK
Africa’s most populous country, Nigeria, is set to deliberate on possible ways to regulate cryptocurrencies. The country is well known for online scamming commonly referred to as K-9 scammers globally.
Nigeria’s Senate Committee on Banking and Other Financial Institutions will review the cryptocurrency especially the Bitcoin the most common cryptocurrency in Africa. The committee will investigate the cryptocurrencies and draft possible recommendations that should be implemented to protect the people from financial losses due to exposure to the crypto market.
On Jan 30th, the Senate ordered an investigation on of Bitcoin Trading in the country. Lawmakers publicly admitted that the cryptocurrencies are openly being sold, with promises of fast return like a “get rich quick” scheme. Investors are lured by the high rate of returns due to arbitrage trading common on the continent. Due to a low understanding of the market volatility, investors end up losing millions and millions of Niras in the process. Senator Benjamin Uwajumogu stated that the crypto market should be “critically evaluated” a sentiment he shares with other colleagues.
Governor Godwin Emefiele, Nigeria’s Central Bank governor a critic of the cryptocurrencies joins other global policymakers. He compared cryptocurrency trading to gambling and cautioned people on possible losses associated with the market. In 2017, the central bank issued a circular to the local banks warning against holding, trading and using the digital currencies pending approval and regulation in the country. The Central Bank further requires the banks to ensure that customers that are running exchanges have Anti-Money Laundering (AML/ CFT) control and to end the relationship with customers whose AML standards are questionable.
Nigeria’s Bitcoin history is linked to a 30-year old Ponzi scheme, The Mavrodi Mondial Moneybox (MMM) that originated from Russia to Nigeria, where it reaped big from unsuspecting locals with promises of unrealistic returns. When the Nigerian Government started to raid and freeze accounts linked with the scheme, the MMM shifted to the use of Bitcoin requiring users to transact only through the coin. The company portrayed the Bitcoin as the next big thing of the future and Nigerians saw the cryptocurrency as worth to invest in.
Currently, the country is leading in crypto trading in Africa and ranks no 23 globally according to researcher CryptoCompare. It is faced by frequent Ponzi schemes and scams damaging the crypto world reputation. Individual traders are developing countermeasures by creating informal groups and networks on popular social media the Telegram.
