How can we regulate an industry that is constantly evolving, with new innovations and products emerging rapidly? On the global stage, MiCA stands out as one of the most popular frameworks in Europe for regulating the crypto space.
While this seems like a positive step towards protecting investors and users in Europe, what happens when there is no comprehensive regulation, particularly from the government, for such a volatile space like crypto in Nigeria?
Senator Ihenyen, the former President of SiBAN and Lead Partner at Infusion Lawyers, speaking in a panel at the Digital Assets Summit hosted by SiBAN in Abuja on the 6th and 7th said that the Nigerian crypto space needs self regulation for efficiency and the prosperity of the industry.
He noted that while a more robust regulatory framework is expected for the entire industry, because government support is needed for full regulations, the industry needs to self regulate itself to protect users.
SiBAN regulatory framework
Speaking about his tenure as the President of SiBAN, he said the organization established a regulatory framework designed for the crypto industry’s benefit. This framework is intended to provide guidance and enforce security measures to ensure the proper functioning of service providers.
He added that in the cause of waiting for CBN, NCC, and other government bodies, SiBAN has a framework that any crypto or virtual asset service provider (VASP) within Nigeria is free to use whether they are members of SiBAN or not. It is part of SiBAN’s self-regulatory structure for the industry.
Senator also noted that with self-regulation, the industry can avoid the repetition of what is happening with Patricia and what happened with Pinkcoin.
Global crypto self-regulation
On the global scale, Adedeji Owonibi, the Founder and COO of Convexity, said that in other to implement self-regulation in the crypto market, and in response to concerns by the Financial Action TaskForce (FAFT), a list of global crypto experts and organizations set up the IVMS 101 framework to combat money laundering.
The IVMS 101 is a standardized framework aimed at promoting transparency and collaboration within the cryptocurrency industry, ensuring that major transactions in the crypto space are not hidden and adhere to regulatory standards.
The Convexity COO also noted that the crypto space should expect a version 102 which is an updated version of what is obtainable today, and that every service provider should take note of it.
Finally on self-regulation, Preye Itonyo, the Deputy Director of the Digital Economy Development Department, NITDA said that one reason self-regulation is needed in crypto is that the traditional system including the method of enacting laws to regulate the crypto space is slow.
Hence, there should be guidelines internally that protect users prior to the release of the government rules and laws.
