SiBAN Seeks Federal Gov’t Collaboration To Regulate Digital Asset Providers

The Stakeholders in the Blockchain Technology Association of Nigeria (SiBAN) has sought collaboration with the Federal Government in regulating Virtual Assets Service Providers (VASP).

This call was in response to recent concerns raised by the activities of cryptocurrency exchange service providers like Binance, operating in country.

According to a statement signed on Wednesday by President of SiBAN, Obinna Iwuno, the VASP code of conduct, developed in 2022, will foster responsible practices within the digital asset space.

Iwuno said the primary goal of the regulatory framework was to ensure the proper oversight of digital asset service providers, contributing to a more secure and transparent environment for both businesses and consumers.

He said the code of conduct was already available in the public domain to facilitate the establishment of a responsible and ethical local blockchain industry in Nigeria, Africa’s largest economy.

Iwuno mentioned that there was already compliance to the code of conduct within SiBAN and industry-wide. However, he emphasised the need for broader compliance beyond SiBAN, hence making the document available to the public.

Iwuno stated that when the sector is regulated, it will boost the confidence of users, investors, and even digital currency adoption in the country.

He expressed willingness and expectations for regulatory engagement with the federal government to discuss the future of the digital asset industry and ensure its sanitisation.

The president said the current code of conduct was just the initial step, adding that there was a need for expansion and subsequent legal backing to enforce compliance.

Notably, SiBAN acknowledges its current lack of legislative support and expresses a willingness to collaborate with regulators for further development.

Iwuno stated, “We expect the regulators to invite us for a discussion on the way forward to sanitize the digital asset industry.

“This is just a code of conduct that needs legal backing. We cannot expand beyond what we have done; if they need us to help them do that, we can do that.

“If we had this law in place, it would have been much easier to deal with players who violate the laws. Before players come into the sector, they would have to have a license and be properly regulated,” he argued.

The code of conduct contains 16 codes and apply to VASPs in Nigeria, who are either registered SiBAN members or non-members.

Part of it reads, “VASPs must comply with all applicable laws, regulations, and guidelines related to virtual asset services in Nigeria.

“VASPs must provide clear and accurate information to clients about the products and services offered, including fees, terms, and conditions.

“VASPs must implement robust security measures to safeguard clients’ virtual assets and personal information from unauthorized access, theft, or misuse.”

Recall that in a recent development, two high-ranking executives of Binance were detained in Abuja last week, immediately after they arrived in Nigeria.

The purpose of their visit was to engage in negotiations with Nigerian authorities amidst an ongoing crackdown on the cryptocurrency platform.

The Presidency accused Binance and other crypto firms as facilitators for currency speculators and money launderers engaged in criminal activities.

The government asserted that these illicit activities conducted on such platforms were contributing significantly to the depreciation of the national currency, the Naira.

In September 2023, Nigeria’s Securities and Exchange Commission (SEC) officially disclaimed Binance Nigeria Limited.

The regulatory body declared that the platform was operating “neither registered nor regulated by the Commission” and deemed its operations in Nigeria as illegal.

Despite this regulatory stance, Binance persisted in its operations, attracting substantial patronage, particularly from urban youths, suspected speculators, and money launderers. It has, however, announced its decision to stop operations in Nigeria effective March 8, 2024.