Lack of proper regulation makes cybercrime thrive, says Green

Director of the Attorney General Alliance (AGA) Africa, Mr. Marcus Green, has said that cybercrimes thrive on the continent partly due to lack of proper regulation.

Speaking at a webinar on “Digital currencies and crypto derivatives: banking, regulatory and cybersecurity”, Green noted that digital currencies and crypto derivatives are part of the emerging currencies and new payment methods that are gaining acceptance in recent times.

The webinar was organised in collaboration with the Lagos Business School, the Economic and Financial Crimes Commission (EFCC) and the Fintech Association of Nigeria (FinTechNGR).

In his opening remarks, Green said: “The COVID-19 pandemic has escalated the use of those currencies,” he said.

He noted that whereas digital currencies are centralised, meaning that transactions within the network is regulated in a centralised location like a bank, cryptocurrencies and crypto derivatives are mostly decentralised, and are not formally governed or regulated.

“Many African countries and countries in the world lack proper regulatory frameworks for cryptocurrencies and crypto derivatives hence building an ideal ecosystem for cybercrimes to thrive,” he said.

Green pointed out that in Nigeria, for instance, there is no specific regulation that has declared cryptocurrency trading illegal or criminalised it, although the Central Bank of Nigeria (CBN) prohibited transactions on cryptocurrencies in the banking sector.

He said the webinar was organised to provide an ideal platform to expose participants to the intrinsic banking, regulatory and cybersecurity issues in the both digital currency and crypto-assets/derivatives.

According to him, the Attorney General Alliance Africa collaborates with government, non-governmental, private sector and civil society to provide legal training, strategic advisory programmes and strengthen the international rule of law specific to each country’s needs.

“We bring subject matter experts from the US and African countries to train investigators, prosecutors, judges, magistrates and other law enforcement officers on the investigation and prosecution of transnational crimes such as human trafficking, money laundering, cyber-crime, counterfeit drugs, wildlife trafficking, gender-based violence and other cross border criminal activities,” Green said.

The facilitators included General Counsel for AGA, David C. Blake; founder of the Cyber Security Collective Africahackon, Dr. Bright Gameli Mawudor; a certified digital finance practitioner (CDFP) Kombe Kaponda; Adedayo Adebajo of FinTech NGR; Prof. Olawale Ajayi of the LBS; Executive Director, Information Technology and Operations at Access Bank Plc., Ade Bajomo and Head of Cybercrime Unit at the EFCC in Lagos, Whyte Iyowuna Dein.

Dein, who represented the EFCC Chairman Abdulrasheed Bawa, also believes that the absence of regulation or the operation of cryptocurrency is one of the major challenges in the investigation of crime around it.

Other challenges, he said, are the knowledge gap “in the foundational know-how” of crypto investigation and the high cost of subscribing to proprietary cryptocurrency investigation tools.

He also highlighted some crypto scam schemes, such as “pump and dump”, as well as “social engineering aimed at stealing private keys”.

“One of the schemes we recently discovered was when users received a message about the sale of an exclusive coronavirus vaccine earlier than official schedules and only for those who have Bitcoins. This type of fraud was especially prevalent when the vaccines just become available,” Green said.

According to him, victims were mostly contacted online via Facebook, Instagram, Telegram and Leeds (harvested/compromised victims’ details for spamming purposes).

Dein said: “Over 1,500 fraudulent global resources aimed at potential crypto investors have been detected in Africa since the beginning of 2021. In Kenya, the share of all users targeted was 0.85 per cent. In Nigeria, it was 0.71 per cent.”

He said the EFCC would continue to review its strategies, while looking at what other jurisdictions are doing as it battles cybercrimes.
Bajomo believes money has to be digitised to move with the times, noting that “the world is embracing modern technology”.

“Money will continue to be digitised as the world moves towards contactless payment,” he said.

Adebayo emphasised that cryptocurrencies open up more sophisticated trading strategies and allow access to otherwise unavailable assets or markets, among other benefits.

He warned that short term fluctuations can still lead to significant losses for users, adding that “derivatives bear an inherent risk,” even leaving a lot of people suicidal when deals go wrong.