Nigerian Crypto Firms Adopts KYC Measures to Comply with CBN’s Directives

The Nigerian crypto exchanges have started complying with the directives provided by the Central Bank of Nigeria regarding the KYC (Know Your Customer) checks, self-regulation, and background checks of their clients. 

In regards to the crypto exchanges, self-regulation is the development of the guidelines and a code of conduct for the participants of the market and how to operate within the industry. The guidelines include the implementation of the KYC regulations, transparency measures, and ensuring security against cyberattacks. 

One of the crypto exchanges said, “users who register on its platform “have to provide their government-issued ID or BVN, and also pass a 3D liveliness test or selfie amongst others, and accept the Terms, the Privacy Policy. They also have to agree to provide complete and accurate information when opening an account and agree to timely update any information they provide to exchange to maintain the integrity and accuracy of the information.”

The guidelines that are used by the exchanges are in line with the guidelines provided by the International Organisation of Securities Commissions (IOSCO). These guidelines measure transparency and accountability, the relationship based on contracts, and sharing of information. 

Another exchange noted that “We are now required to comply with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) legislation in several of the countries we operate in. Where that’s not yet the case, we have clear guidance from the Financial Action Task Force (FATF) to measure our approach against.”

Nigeria’s vice president, Professor Yemi Osinbajo, has recently highlighted that the crypto market should adopt strong regulatory measures since it would not be possible to ban the industry altogether. He believes that the cryptocurrency industry, in the coming years, will transform the face of the banking industry and the country needs to be prepared about the shift instead of banning it altogether. 

The Central Bank of Nigeria has published directives to protect the financial system of Nigeria from the risks related to crypto-asset transactions. According to the regulators, the risks have increased over the years and they have serious consequences. It is extremely important to implement strict measures to maintain the integrity of the financial stability and financial system.