Blockchain can combat illicit fund transfers, Nigeria’s top finance investigator says

As a crypto investor with experience in Africa and a keen interest in global financial trends, I find the intersection of blockchain technology, AI, and illicit financial activities to be a crucial area of concern. The revelation by Nigeria’s Economic and Financial Crimes Commission (EFCC) chair, Olukoyede, that illegal fund flows from Africa amount to $88.6 billion annually is alarming. These funds could have been utilized for essential infrastructure, healthcare, and education instead.

As a researcher exploring the intersection of technology and crime prevention, I’ve come across an intriguing development in Nigeria. The Economic and Financial Crimes Commission (EFCC) chair, Olanipekun Olukoyede, has highlighted the potential of blockchain technology and artificial intelligence (AI) in combating illicit activities. These advanced technologies can offer enhanced security and transparency, making it more difficult for criminals to conduct their nefarious activities unchecked.

Africa faces significant financial losses each year. Illegally channeled funds amount to a considerable sum of $88.6 billion annually.

Based on The Guardian’s report, Olukoyede voiced worries that the allocated funds would be more beneficial if invested in crucial infrastructure projects, healthcare services, and educational facilities instead.

The Commission’s representative, Dele Oyewale, reportedly shared this information during his keynote speech at the Pan-African Conference against Illicit Financial Flows and Tax Evasion in Tunis, Tunisia.

As a researcher studying asset recovery and financial reintegration in Africa, I attended a conference where we collectively delved into groundbreaking approaches to address these issues. This gathering provided an excellent platform for engaging with influential figures in the field, fostering valuable collaborations and exchanging innovative ideas.

As an analyst, I would express it this way: I, too, acknowledge the intricacies involved in the process of asset recovery. The complexities range from technical hurdles in tracking down and freezing ill-gotten funds, to legal challenges in navigating various jurisdictional complexities, and political obstacles that can complicate the repatriation of these assets.

He advocated for strengthening the legal and institutional structures in African countries to better tackle illicit financial flows.

As a researcher, I’ve come across disturbing information from Olukoyede in May. He revealed that terrorists have been adopting a new tactic: leveraging unsuspecting young cryptocurrency traders to finance their illicit activities within the country. This trend makes it more challenging for us to trace and block these financial transactions.

The Economic and Financial Crimes Commission (EFCC) has taken decisive action by freezing 1,146 suspected fraudulent bank accounts involved in ill-gotten deals of foreign exchange, money laundering, and funding of terrorism within Nigeria’s borders.

As a researcher studying the use of digital currencies in illicit activities, I discovered that a substantial portion of the suspicious transactions could be traced back to peer-to-peer cryptocurrency trading platforms. This finding highlights the increasing overlap between the digital currency marketplace and illegal financial dealings.

Olukoyede emphasized the significant achievement of the Economic and Financial Crimes Commission (EFCC) in retrieving $20 million in cryptocurrency from fraudsters.

In a significant action against Binance, a prominent cryptocurrency exchange, and one of its high-ranking officials, the Economic and Financial Crimes Commission (EFCC) brought criminal accusations, alleging money laundering and tax avoidance.

The chairman of the Economic and Financial Crimes Commission (EFCC) underscored the significance of enhancing expertise through capacity building, establishing strong judicial frameworks, and fostering collaboration and unity among nations on a local, continental, and global scale.

He has championed the employment of sophisticated techniques like data analysis, blockchain, and artificial intelligence to strengthen asset tracing and retrieval processes.

These new technologies are significant in the fight against financial crimes facilitated by cryptocurrencies, implying a future where sophisticated technology enhancements fortify conventional law enforcement methods.

Crypto and money laundering

Global money laundering operations have seen a notable increase in the use of cryptocurrencies, with East and Southeast Asia being particularly active regions in this regard.

The UNODC report reveals that the surge in popularity of cryptocurrencies and the emergence of unlawful online gambling platforms and junkets in East and Southeast Asia have led to a significant increase in clandestine financial transactions and money laundering activities within the region.

Criminal organizations have taken advantage of weaknesses in the digital currency market and internet betting sites. They employ cryptocurrency trading platforms and digital wallets to introduce vast sums of ill-gotten gains, approximately $10 billion, into the mainstream financial system. This process frequently includes blending funds and executing covert transactions.

In Nigeria, Binance, a major player in the global cryptocurrency exchange market, has been under scrutiny due to accusations involving $35.4 million in suspected money laundering and tax evasion. The company’s CEO, Richard Teng, announced that he had been approached by anonymous individuals from Nigeria who demanded a $150 million ransom in cryptocurrency. However, the Nigerian authorities rejected these claims as unfounded and an attempt to divert attention away from ongoing probes into Binance’s business dealings within the country.

As a researcher studying the financial regulatory landscape, I’ve identified that the Financial Conduct Authority (FCA) in the United Kingdom has pinpointed cryptocurrency firms as high-risk sectors for money laundering activities between 2022 and 2023, alongside retail banking, wholesale banking, and wealth management. In response to this risk assessment, law enforcement agencies in the UK have dispatched crypto tactical advisors across the country to seize digital assets linked to criminal enterprises.

On June 4th, Bill Guan, the CFO of The Epoch Times, was accused of being involved in a $67 million cryptocurrency money laundering case.

Based on the indictment, between 2020 and May 2024, Guan and his “Make Money Online” group are accused of obtaining unemployment benefits and identities through fraudulent means. They allegedly utilized these ill-gotten resources to procure prepaid debit cards. Subsequently, they sold these cards for a reduced price in exchange for cryptocurrency on designated platforms.

As a crypto investor, I’ve come across some troubling allegations. It is claimed that suspicious funds, which were initially gained illegally, were laundered through different routes. Some of these channels reportedly involved bank accounts belonging to The Epoch Times and personally owned by Guan. Moreover, his cryptocurrency holdings were also used in this process according to the accusations.

When financial institutions raised concerns over suspected unauthorized transactions, Guan allegedly disguised the source of the funds by insisting they stemmed from genuine internet donations.

Read More

2024-06-29 18:46