ICPC raises concern over use of cryptocurrency for ransom payments

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) has expressed concern over the possible adoption of cryptocurrency for ransom payments.

Bolaji Owasanoye, ICPC chairman, said this on Tuesday in his presentation to the senate committee on banking, insurance and other financial institutions during its hearing on the decision of the Central Bank of Nigeria (CBN) (CBN) to stop financial institutions from dealing in cryptocurrencies.

A statement by Azuka Ogugua, the commission’s spokesperson, quoted Owasanoye as saying virtual currencies pose a major threat to the operations of law enforcement agencies in the country.

“The current National Identification Number registration and linking with SIM cards is a pointer to the fact that insurgents, terrorists, kidnappers, bandits, and drug merchants have used the anonymity of unregistered SIM cards to commit their crimes with relative ease, ” Owasanoye was quoted to have said.

“Cryptocurrencies guarantees similar anonymity and can easily be used as leverage for terrorist financing and other crimes. 

“With the NIN registration, cryptocurrencies may become an alternative payment platform for kidnappers and this would be impossible for law enforcement agencies to trace.”

According to the ICPC chairman, the CBN’s ability to regulate monetary policy may be lost due to the fact that cryptocurrencies are issued by private entities, which are foreign, and not issued or regulated by the apex bank.

Citing a case study of a current investigation by the commission on money laundering involving several hundreds of millions of naira, he lamented that the anonymity of digital currencies has led to its utilisation for criminal activities.

“The main suspect used technology in placing the money in the banking sector. A sizable amount was traced to several bank accounts but before investigators recovered some of the money, a large proportion had been made to disappear using serpentine ICT-aided transfer schemes that has so far eluded investigators, ” the statement further quoted the ICPC boss to have said.

“While the persons whose accounts were used have been located, the criminal mastermind has remained invisible and unidentified.

“This real ongoing case is a glimpse into the world of anonymity of virtual or digital transactions. With cryptocurrencies, the wallet of the user of cryptocurrency system only stores information, or encrypted links in the blockchain where transaction confirmation can be found.

“There is no movement of any ‘currency’ in the real sense of the word. By their very nature, they provide considerable anonymity that is almost impossible to be accessed by unauthorised persons, including law enforcement authorities.”