Articles

INTRODUCTION

Every online activity is saved as a digital record and is always accessible on the internet. It is said that the Internet has a memory and that it is slow to forget. The right to privacy has become necessary in the digital age because personal information can be easily shared and maintained. A developing legal notion known as the "Right to Be Forgotten" (RTBF) enables people to ask for specific personal data to be removed from public view, primarily online. Understanding and implementing the RTBF is becoming increasingly crucial as Nigeria works to improve its data protection laws. The Right to Be Forgotten and its adoption issues in the Nigerian context are examined in this article.

UNDERSTANDING THE RIGHT TO BE FORGOTTEN

The right to be forgotten acknowledges the importance of individuals having control over their data and having it deleted or removed from databases and online platforms. It allows individuals to request the deletion of personal information that is no longer required, has been unlawfully processed, or is being used in a way that breaches their rights. This right is an essential tool for individuals to gain control over their digital footprint and regulate the information they publish online. It allows a person to have data about them destroyed so that outside parties, notably search engines, cannot discover it.

The right to be forgotten allows a Data Subject to have their data erased by a Data Controller or Data Processor due to a previous action or occurrence. In other terms, it is the right to have information about a person, particularly unpleasant and obsolete ones, deleted from online searches or directories under specific conditions. This right emanates from the decision of the European Union Court of Justice in the case of Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, Mario Costeja González (2014).[1]

LEGAL FRAMEWORK OF THE RIGHT TO BE FORGOTTEN IN NIGERIA

The Constitution of the Federal Republic of Nigeria, 1999

Like most other laws, data protection laws trace their origin to the 1999 Constitution, from which they derive their validity. Section 37 of the 1999 Constitution provides that citizens' privacy, their homes, correspondence, telephone conversations and telegraphic communications is guaranteed and protected. This provision is widely acknowledged as the foundation for data protection regulation, particularly in connection with processing personal data in the digital age. The provision, however, does not address specific components of the right to privacy, such as the right to be forgotten. Thus, while the Constitution has laid a solid framework for enforcing the right to privacy, it failed to include adequate provisions for enforcing the right to be forgotten as a component of privacy.

National Information and Technology Development Agency Act, 2007

Section 6 (a) and (c) of the National Information and Technology Development Agency Act empowers the agency to make regulations under which the Nigerian Data Protection Regulation (NDPR) was issued on 25 January 2019. This Act was created to acknowledge public and commercial entities' widespread online migration of business and other information systems. These data systems are now essential components of the information infrastructure that need to be controlled, secured, and protected from breaches involving personal information.

The Nigerian Data Protection Regulation, 2019

While the NDPR's data subject rights are not as comprehensive as those under European Union law, the legislation specifically includes the right to erasure.

Paragraph 2.1 (1c) of the NDPR provides that personal data must be stored only for the period it is reasonably needed. The ambiguous nature of this provision has been further clarified in paragraph 8 of the NDPR Implementation Framework 2020. The Implementation Framework states that, unless expressly agreed upon by the data subject and the controller, data must not be kept for more than three years from the data subject's last interaction with the digital platform or six years in the case of an online contractual transaction. In all other circumstances where data is processed without the data subject's consent, the data must be erased immediately upon request unless a statute prevents such deletion or the data retention is required for a court action or inquiry involving the subject.

Further to paragraph 2.1 (1c) of the NDPR, paragraph 3.1 (9) lists the grounds for requesting personal data erasure in the regulation. The grounds are:

      i.        Where erasure is mandated by the law or agreement between the data controller and the data subject.;

     ii.        Where the information is inaccurate;

    iii.        Where the information has been kept without the consent of the data subject;

   iv.        Where the data subject objects to the continued processing of the data, and there are no overriding legitimate grounds to keep the data;

    v.        Where the processing is no longer necessary in relation to the purpose for which they were obtained.

The application of paragraph 3.1(9) is not contingent on the existence of a contractual connection between the data subject and the controller who processes the data, in contrast to paragraph 2.1(c). It has the consequence of retaining data subjects' rights to demand erasure from organisations and digital platforms for personal information stored by such entities, regardless of whether it was posted by or obtained from third parties. This implies that data subjects significantly influence how their data is used in the digital environment.

The Nigerian Data Protection Act, 2023

The Nigerian Data Protection Act 2023 currently establishes an extra framework for enforcing data subjects' rights in Nigeria, including the right to be forgotten. Section 34 of the Act expressly addresses a data subject's full variety of rights, including the right to request erasure. Section 34(1)(c) of the Act grants a data subject the right to demand from a data controller, without restriction or unreasonable delay, the correction or, if rectification is not possible, deletion of the data subject's data that is inaccurate, out of date, incomplete, or misleading. Section 34(1)(d) of the Act provides that a data subject has the right to obtain from the data controller the erasure of personal data concerning the data subject.

Section 64(2)(f) of the Act states that all existing regulatory instruments, such as regulations, directives, and authorisations issued by the National Information Technology Development Agency (''NITDA'') or the Nigeria Data Protection Bureau (''NDPB''), will remain in force until they expire, are repealed, replaced, reassembled, or altered. In other words, the provisions of the NDPR relating to the right to be forgotten remain in effect and, along with the Act, serve as the legal foundation for direct enforcement of the right to be forgotten in Nigeria.

LIMITATIONS ON THE RIGHT TO BE FORGOTTEN

Despite the significance of data subjects' privacy rights, which serve as the foundation for the right to erasure, the right is not absolute and has restrictions.
One of the most challenging issues in implementing the right to be forgotten is striking a balance between privacy rights and freedom of expression. There is a need to ensure that the right to be forgotten does not result in the suppression of critical information or historical records. Striking this balance necessitates careful consideration and regulatory frameworks safeguarding privacy and free expression. In some cases, the public's right to free expression and information may precede the data subject's desire to maintain privacy rights.

Another barrier to data protection enforcement is a lack of understanding of data protection rights. Public education initiatives and easily accessible data privacy information can help users manage their online presence and connect with data controllers more effectively. There is currently no verdict by the Nigerian Courts on this matter.

The European Court of Justice in Google Spain SL, Google Inc v. Agencia Española de Protección de Datos, Mario Costeja González recognised that public interest in information connected to public figures may frequently override the rights of such individuals to demand erasure. Accordingly, continuing publication or storage of the data subject's information may be required to meet a legal duty. In this context, the NDPR Implementation Framework 2020 prohibits using the NDPR on personal data held for national security, public safety, or public health purposes. As a result, the data subject will be unable to demand the erasure of such information held by statutory organisations deemed vital for the public's benefit.

CONCLUSION

As Nigeria continues to improve its data protection legislation, the Right to Be Forgotten emerges as a critical component of digital privacy. While the NDPR offers a solid framework, explicit provisions and judicial interpretations are required to integrate the RTBF into Nigerian law properly. Addressing the issues and balancing the many interests will be critical to adequately implementing this right and ensuring that it benefits individuals and society.

IOLA Legal Services

Ikeola Atilola

INTRODUCTION

In recent years, money laundering has gained international attention as corrupt individuals conceal illicit gains through financial systems. The Money Laundering (Prevention and Prohibition) Act of 2022 represents a significant milestone in the effort to stem money laundering, aiming to strengthen the framework for detecting, preventing, and prosecuting money laundering activities within Nigeria. This comprehensive legislation not only defines and criminalises money laundering but also imposes stringent obligations on financial institutions and designated non-financial entities to implement effective anti-money laundering measures. By outlining clear guidelines, penalties for non-compliance, and avenues for international cooperation, the Act seeks to fortify the nation's financial integrity and protect its economy from the detrimental effects of illicit financial flows. This article provides an in-depth overview of the key provisions and implications of the Money Laundering (Prevention and Prohibition) Act of 2022, highlighting its pivotal role in safeguarding financial systems and promoting transparency and accountability in the financial sector of the country.

MAJOR INNOVATIONS OF THE ACT

1.    Limitation on Cash transactions

To prevent the unauthorised transfer of substantial amounts of money, the Money Laundering Act places restrictions on cash transactions. Cash payments over five million Naira (N5,000,000.00) are not allowed for individuals, while corporate entities are limited to ten million Naira (N10,000,000.00). A financial institution must be consulted when a transaction above the allowed limit in order to guarantee a clear and traceable record of the money involved. Similarly, in an attempt to evade the obligation to report a transaction that is required to be reported under the Money Laundering Act, it is prohibited by the Act to make numerous small transactions with one or more financial institutions or DNBPs.[1] For financial institutions, the report is made to the Nigerian Financial Intelligent Unit (the “NFIU”) of the Central Bank of Nigeria (“CBN”), while for DNBPs on the other hand, the report is made to the Special Control Unit Against Money Laundering (“SCUML”).[2]

2.    Establishment of the Special Control Unit under the Economic and Financial Crimes Commission

As part of its objectives, the Act established the Special Control Unit, also known as the Special Control Unit Against Money Laundering (the SCUML), whose task it was to carry out the Act's designated non-financial businesses and professions provisions in an efficient manner.[3]

3.    Jurisdiction

The Federal High Court located in any part of Nigeria, regardless of the location where the offence is committed, shall have jurisdiction with respect to matters under the Act and offences committed under the Act. Additionally, the new Act expanded its jurisdiction outside of Nigeria to include situations in which the accused person is in Nigeria and has not been extradited to another nation for prosecution, as well as situations in which the alleged offence was committed on a ship, vessel, or aircraft registered in Nigeria by a citizen or non-citizen of Nigeria, provided that the accused person's actions would also be prohibited by the laws of the nation in which the offence was committed.[4]

4.    Expansion of the Definition of Funds

 In line with technological reality, the definition of funds under the Act has been expanded to include ‘virtual asset'.[5] It also extends the definition of a financial institution to include Virtual Asset Service Providers.

5.    Confidentiality Between Lawyers and their Clients

 Lawyer-client privilege is restricted under the Act. The Act states that the invocation of client confidentiality and legal professional privilege shall not apply in conjunction with;

a.   The purchase or sale of property

b.   The purchase or sale of any business

c.   The managing of client money, securities, or other assets

d.   The opening or management of bank, savings, or securities accounts

e.   The creation, operation, or management of trusts, companies, or similar structures

f.     Anything produced in furtherance of any unlawful act.[6]

It is noteworthy that this position has been nullified by the courts as one of the basic tenets of the legal profession is confidentiality. The Court of Appeal in Mekwunye v Carnation Registrars Limited[7] and in Central Bank of Nigeria v Registered Trustees of the NBA[8] confirmed that the provision violates the duty of confidentiality imposed upon a lawyer by Legal Practitioners Act, Evidence Act and RPC. This was also recently upheld by the Federal High Court in Arome Abu v CBN & Ors[9],where the court held that sections 6, 7, 8, 9, 11, and 30 of the Money Laundering Act 2022 are contrary to the existing provisions of section 37 of the Constitution, section 20 and 21 of the Legal Practitioners Act, and section 192 of the Evidence Act 2011.

6.    Inclusion of New Businesses and Professions as Part of Designated Non-Financial Business and Profession (DNBP)

While the repealed Act referred it to as a Designated Non-Financial Institution (DNFI). The new Act has extended Designated Non-Financial Institution to include the following:

a. Businesses involved in the hospitality industry;

b. High-value dealers;

c. Mortgage brokers;

d. Pools betting;

e. Trust and company service providers;

f.   Dealers in mechanized farming equipment, farming equipment, and machinery;

g. Dealers in precious metals and precious stones;

h.  Practitioners of mechanized farming;

i.    Notaries;

j.    Dealers in real estate, estate developers, estate agents, and brokers.[10]

The provision of this section as it relates to legal practitioners and notaries as designated non-financial businesses and professions is also contrary to the decision of the courts in Mekwunye v Carnation Registrars Limited, Central Bank of Nigeria v Registered Trustees of the Nigerian Bar Association, and in Arome Abu v Central Bank of Nigeria & Ors.

7.    Extension of Regulation to Internet Casino and Ship-Based Casino

The Act specifically includes internet and ship-based casino as opposed to the repealed Act, which did not specifically state the kind of casino to be regulated.[11]

8.    International Transfers

Any transfer of securities or money exceeding $10,000 to or from a foreign nation must be disclosed within 24 hours of the transaction to the Securities and Exchange Commission ("SEC") and the National Financial Crimes Unit (NFIU). Those entering or leaving Nigeria with cash or other negotiable instruments valued at more than $10,000 US are required to declare them to the Nigerian Customs Service, who would then notify the NFIU and CBN.[12] If found guilty of making a false statement or neglecting to provide the Nigerian Customs Service with the required information, the offender faces a minimum two-year prison sentence and/or forfeiture of any unreported funds or negotiable instruments.[13]

9.    Identification of Clients

It is required of financial institutions and DNBPs to verify the identity of their clients. They must put in place due diligence procedures (such as obligatory Know Your Customer onboarding procedures) to guarantee compliance and make sure that the identities of those making or receiving payments through their platforms or services are known and verifiable.[14] Aside from the ongoing duty to closely examine the transactions they handle, financial institutions and DNBPs are also barred by law from using false accounts.[15]

10. Reporting Suspicious Transaction

The Act mandates Financial Institutions and DNBPs to report suspicious transactions to the NFIU within 24 hours of the transaction and take appropriate actions to prevent money laundering. Suspicious transactions as contemplated in the Money Laundering Act includes transactions which:

a.   involves a frequency which is unjustifiable or unreasonable;

b.   is surrounded by conditions of unusual or unjustified complexity;

c.   appears to have no economic justification or lawful objective;

d.   is inconsistent with the known transaction pattern of the account or business relationship; or

e.   involves the proceeds of a criminal activity, unlawful act, money laundering or terrorist financing.[16]

The NFIU may request any further information it thinks necessary after receiving a report of a suspicious transaction, and it may also put a 72-hour stop order on the transaction. In the event that a stop notification has expired or is not received, the Financial Institutions or DNBPs will move forward with the transaction.

11. Enhanced Due Diligence for Politically Exposed Persons

Financial institutions and DNBPs must put procedures in place to identify clients who are Politically Exposed Persons (PEPs) or whose beneficial owner is a PEP. The Money Laundering Act places a greater degree of due diligence on PEPs. Financial Institutions and DNBP must obtain senior management approval before establishing such business relationships, take reasonable steps to establish the PEPs' source of wealth and funds, and conduct enhanced ongoing monitoring on that relationship for any foreign or domestic PEPs entrusted with a prominent function by an international organisation.[17]

12. Risk Evaluation

Risk assessments for new products, business processes, and technology must be completed by Financial Institutions and DNBPs before their launch in order to identify and control the possibility of money laundering.  After that, any identified risks must be managed and mitigated by Financial Institutions and DNBPs by taking the necessary actions.

13. Penalties

Under the Money Laundering Act, acts involving money laundering may be prosecuted and punished with fines, jail time, or the cancellation of business licenses. Under the Money Laundering Act, in particular, a person found guilty of any of the money laundering offences specified faces a minimum five times the value of the proceeds from the crime in fines, or four to fourteen years in prison.[18] In addition, if a business organisation engages in money laundering, it may have its licence or certificate withdrawn and be required to pay a fine equal to five times the amount of the unlawful proceeds.

CONCLUSION

In conclusion, Nigeria's Money Laundering (Prevention and Prohibition) Act, 2022 is a critical step in the fight against illegal financial activities and in strengthening the integrity of the nation's financial system. The main features of the Act have been discussed in this article, along with its definitions of money laundering, the strict requirements placed on financial institutions, and the severe penalties for non-compliance. Nonetheless, issues like the efficacy of law enforcement and the requirement for ongoing adjustment to changing financial crime strategies continue to be relevant. Looking ahead, continuing improvements and modifications to regulatory frameworks will be essential to bolstering the Act's effectiveness and successfully addressing new risks.

IOLA Legal Services

Ikeola Atilola

For further information, contact us today.

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 INTRODUCTION 

In many parts of the world, including Nigeria, same-sex marriage remains a sensitive and divisive topic. The legal status of same-sex marriage is a particularly difficult subject in a nation where traditional values and religious beliefs have a strong influence on societal norms and legal systems. The Same-Sex Marriage (Prohibition) Act (SSMPA) of 2014, which embodies a significant and explicit prohibition of same-sex marriages and civil unions in Nigeria, is the cornerstone of Nigeria's legal position on same-sex marriage. This article explores the legal position of same-sex unions in Nigeria today, examining the laws that affect same-sex sexual relationships in Nigeria.

LEGAL FRAMEWORK OF SAME-SEX SEXUAL RELATIONSHIP IN NIGERIA

THE PENAL CODE ACT 

The Penal Code, which applies in the northern states, criminalise same-sex relationships. Section 284 of the Act prohibits "carnal knowledge against the order of nature," which includes same-sex sexual intercourse. It states that whoever has carnal knowledge of any person against the order of nature or who allows a male to have carnal knowledge of him against the order of nature is guilty of an offence punishable by fourteen years in prison.

Section 285 addresses attempts to commit unnatural offences, such as same-sex sexual acts. It states that those who attempt or plot to commit such offences face the same punishments as those who successfully carry them out. The provision broadens the definition of criminalisation to include any preparatory measures or conspiracies involving same-sex sexual activity.

Section 286 defines "unnatural offences," increasing the criminalisation of behaviours that are considered antithetical to the natural order, including same-sex acts.

Section 405 of the Penal Code, titled "Vagabonds," prohibits male cross-dressing. A "vagabond" is defined as "any male person who dresses or is attired in the fashion of a woman in a public place, or who practises sodomy as a means of livelihood or profession." According to the Act, anyone convicted of being a vagabond faces a two-year prison sentence, a fine of up to four hundred and fifty Nigerian naira, or both.

THE CRIMINAL CODE ACT

The Criminal Code, which is applicable in the South, criminalise same-sex partnerships. Section 214 of the Act states that any person who has carnal knowledge of any person against the order of nature or who allows a male person to have carnal knowledge of him against the order of nature is guilty of a felony punishable by fourteen years in imprisonment.

Section 215 goes on to describe unnatural offences as acts involving sodomy or any other non-heteronormative sexual activity. This provision reinforces the criminalisation of same-sex sexual conduct by imposing similar punishments.

Conspiracies to perform acts deemed unnatural offences, such as same-sex sexual acts, are prohibited by Section 217. Where a person is proven guilty of trying to carry out these crimes, offenders may serve up to 14 years in imprisonment. The solicitation of same-sex sexual acts or attempts to participate in them is illegal under Section 218. This includes any steps to encourage or obtain such actions, which are subject to the same penalties as the actual conduct.

SAME-SEX MARRIAGE (PROHIBITION) ACT (2014) 

The Same-Sex Marriage (Prohibition) Act (2014) explicitly prohibits the solemnisation of same-sex marriages and civil unions. 

Section 1 of the Act states that any attempt to formalise a marriage or union between people of the same sex is void and legally unrecognisable in Nigeria. This provision is intended to invalidate any legal recognition of same-sex couples, guaranteeing that such unions are not formally sanctioned.

Section 2 of the Act criminalises performing, witnessing, or assisting a same-sex marriage or civil union. This provision is intended to dissuade both those directly involved in same-sex ceremonies and those who help organise or officiate them.

Section 3 states that only marriage between men and women would be lawful in Nigeria. 

Section 4 also prohibits the registration, operation, and support of organisations that advocate for same-sex relationships or rights. The section also prohibits the public exhibition of same-sex relationships and the promotion of same-sex marriage. Individuals who publicly express or support same-sex partnerships risk up to ten years in prison. It also prohibits public demonstrations or debates that promote or normalise same-sex partnerships, increasing legal prohibitions on same-sex sexual relationships’ visibility and advocacy.

Section 5 of the Act specifies penalties for violators of the Act. It criminalises the act of entering into a same-sex marriage or civil union, with a maximum penalty of 14 years in prison. This section underscores Nigeria’s stringent stance against same-sex relationships by legally defining them as criminal acts. The severity of the penalty reflects more significant cultural and official opposition to same-sex unions. The provision also states that organisations that promote or support same-sex sexual relationship concerns can be dissolved, and their leaders or members may face up to ten years in prison. This section aims to discourage any formal or informal campaigning for same-sex sexual relationships, as well as the formation of groups that support or encourage same-sex relationships. The section also criminalises organising public events to promote same-sex marriage.

CONCLUSION 

In conclusion, Nigeria's legal position on same-sex marriage poses a severe threat to same-sex sexual relationships. The combined impact of the Same-Sex Marriage (Prohibition) Act, the Penal Code, and the Criminal Code present a significant obstacle to the recognition and approval of same-sex marriages. These laws not only criminalise such partnerships but also try to repress any form of activism or support, reflecting a more significant social opposition to same-sex sexual relationships.

Ikeola Atilola

On 17 March 2023, President Muhammadu Buhari signed the Copyright Bill, 2022 into law. The Copyright Act 2022 repealed the Copyright Act 1988.^[1] The Act aims to facilitate Nigeria's compliance with international copyright treaties, to effectively protect the rights of authors, to ensure fair compensation and recognition for their intellectual work, to establish appropriate limitations and exceptions to ensure access to creative works, and to improve the capacity of the Nigerian Copyright Commission to administer, enforce, and ensure compliance of persons and entities with the Act's provisions.

The Act attempts to strike a balance between the public interest in innovative works and the right to access information and/or intellectual creations on one hand, and the right of creators to be fairly and sufficiently rewarded on the other hand. Also, the Act addresses the significant difficulties that owners of copyrights experience in the digital sphere and gives owners of those rights, among others, the right to take action against online infringements of their works.

KEY INNOVATIVE PROVISIONS OF THE COPYRIGHT ACT 2022

1. The Act provides for works which are eligible for copyright which includes literary works, musical works, audiovisual works, sound recordings and broadcasts. Cinematography contained in the old Act was excluded from this list and replaced by audiovisual works. 

2. The Act provides for the protection of digital content. This means that online content including pictures, videos, sound recordings and productions of online content creators are protected from copyright infringements. Thus, digital contents cannot be used without obtaining consent from the owner or creators of such works.

3. The Act contains provisions empowering copyright owners to issue notices of infringement for take-downs or deactivation of links to infringing content. The Act grants site blocking powers to the Nigerian Copyright Commission over online content that infringe copyright.

4. Under the new Act, moral rights can be transferred after the author's death either through testamentary disposition or operation of law. Moral rights shall expire when copyright in a work expires.

5. The Act facilitates access to Published Works for Persons who are Blind or Visually-Impaired. This represents a significant advancement in the creation of an inclusive society where everyone can enjoy the advantages of learning.

6. The Act provides for factors for the reliance on the defence of fair dealing. These factors include the purpose of usage, amount and sustainability of the portion used in relation to the work as a whole, and the effect of the use upon potential market or value of the work.

7. The Act vests the ownership in a collective work upon the person on whose directive the work was made. The Act retains the right of authors contributing to a collective work to exploit their individual contributions independently of the right in the collective work.

8. Traditional cultural expressions in the form of folklore are given special recognition under the Act and are protected against appropriation for commercial purposes outside their traditional context. Any party who wishes to make commercial use of expressions of folklore would first need to obtain permission from the relevant indigenous community concerned, and/or the Nigerian Copyright Commission. Failure to do so could result in criminal sanctions being levied against the user.

CONCLUSION

Creators, innovators, and brand owners especially those operating in the digital sphere will undoubtedly benefit significantly from the changes made by the Act. The Act serves as a bold step towards addressing the looming threats posed by technological advancement.

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INTRODUCTION

Cryptocurrencies have grown widely used worldwide, but their legal position in many nations remains somewhat murky. They are classified as currencies, securities, properties, assets, commodities, tokens, and so on, but not money. The increasing popularity, qualities, and potential of cryptocurrencies have caused numerous countries to consider their regulation.

A cryptocurrency (also known as virtual currency) is a digital currency in which transactions are validated, and records are kept by a decentralised open-ledger system that employs encryption rather than a centralised authority. It is a digital asset intended to function as a medium of trade in which each coin's ownership record is kept track of in a ledger that exists as an electronic database. Once a niche interest, cryptocurrency expanded to become a global phenomenon that is changing the financial industry.

CLASSIFICATION OF CRYPTOCURRENCY AS A COMMODITY

The taxes, trading, and legal recognition of cryptocurrencies are all impacted by Nigeria's intricate and dynamic legal classification.

According to the Nigerian Securities and Exchange Commission (SEC), cryptocurrencies fall under the commodity category. According to this categorisation, cryptocurrencies are assets that can be traded and whose value is subject to changes in supply and demand in the market. In Nigeria, cryptocurrencies that are categorised as commodities are liable to taxes. Guidelines for taxing cryptocurrencies have been released by the Federal Inland Revenue Service (FIRS), which treats them like other assets or commodities for income tax purposes. Trading cryptocurrency profits are usually liable to capital gains tax. Nigerian regulations about cryptocurrencies are also impacted by their status as commodities. The SEC regulates securities and commodities, ensuring that exchanges and trading platforms abide by all applicable rules and laws. This covers the prerequisites for Bitcoin exchange registration and licencing.

Nigeria's cryptocurrency classification policy aligns with global practices, which generally recognise cryptocurrencies as assets or commodities rather than as legal money. This classification highlights initiatives to control cryptocurrency dangers while maximising its possible advantages, like financial inclusion and innovative digital payments.

Although the SEC has classed cryptocurrencies as commodities in Nigeria, the regulatory environment is still changing and open to new developments. In order to guarantee that cryptocurrencies are integrated into the more extensive financial system and to shape the future of cryptocurrencies in Nigeria, international cooperation, uniform enforcement, and clear regulations are essential.

REGULATION OF CRYPTOCURRENCIES IN NIGERIA

Two statutes in Nigeria came close to making provisions that can be extended to virtual currencies; they are the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act[1] and the Investment and Securities Act[2]. The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act establishes an autonomous foreign exchange market and makes provisions for the monitoring and supervising of transactions conducted in the market.  Section 2 of the Act provides that transactions in the market shall be undertaken in any convertible foreign currency and through the usual money market instruments, including foreign banknotes and coins, travellers’ cheques, bank drafts, mail and telegraphic transfers and any other money market instruments as CBN may from time to time determine with the approval of the Minister.

THE CENTRAL BANK OF NIGERIA AND CRYPTOCURRENCY: REGULATION, CHALLENGES, AND FUTURE PROSPECT

Cryptocurrency has generated excitement and regulatory attention globally as a decentralised digital asset. The Central Bank of Nigeria (CBN) significantly impacts how cryptocurrencies are viewed, used, and regulated in Nigeria. It also shapes the regulatory environment around cryptocurrencies in the nation.

With regard to cryptocurrencies, the CBN has voiced cautious scepticism, raising issues with consumer protection, financial stability, and possible illegal use. The CBN issued a circular in February 2021 ordering banking institutions to stop supporting cryptocurrency transactions and to close any cryptocurrency-related accounts. The purpose of this order was to protect the financial system from the threats posed by digital assets and to guarantee adherence to current Anti-Money Laundering (AML) and Counter-terrorism Financing laws. The CBN had voiced concerns about cryptocurrencies and issued repeated advisories against using them, claiming that the anonymity offered by virtual transactions made it possible for cryptocurrencies like Bitcoin, Litecoin, Ethereum, and others to be used for money laundering and terrorism financing.

By releasing a circular on 22 December 2023, the Central Bank of Nigeria (CBN) changed its position on bank accounts connected to or facilitating payments for cryptocurrencies or cryptocurrency exchanges. The Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers have been released by the Central Bank, which has officially revoked its 2021 circular. The guidelines control the creation, management, and utilisation of bank accounts created by Digital Assets (DA) and Virtual Assets Service Providers (VASPs). VASPs are organisations that carry out transactions involving the exchange of virtual assets for fiat money, the exchange of one or more virtual asset types, the transfer of virtual assets, the administration and/or safekeeping of virtual assets or tools that allow control over virtual assets, and the involvement in and provision of financial services associated with an issuer's offer and/or sale of a virtual asset. Financial VASPs like cryptocurrency exchanges and wallet providers are subject to strict rules. Failure to comply could result in severe penalties, including the risk of hefty fines, registration revocation, or even a total ban on operations within Nigeria.

CHALLENGES AND CRITICISMS OF THE CBN’S STANCE

Fintech innovators, cryptocurrency aficionados, and industry players have criticised the CBN's restrictive position on cryptocurrencies. Opponents contend that the prohibition hinders Nigeria's standing in the international digital economy, inhibits innovation, and reduces chances for financial inclusion. Additionally, investors and companies in the cryptocurrency field are hesitant due to the lack of clarity and consistency in the regulatory approach.

 In Nigeria, the legal position of cryptocurrencies is still unclear despite directions from the CBN. Even though the Securities and Exchange Commission (SEC) categorises cryptocurrencies as commodities, there are regulatory gaps and difficulties with enforcement because no comprehensive legislation addresses cryptocurrencies directly. This ambiguity presents difficulties for cryptocurrency exchanges, investors, and consumers looking for legal certainty and protection under Nigerian law.

THE FUTURE DIRECTION OF CRYPTOCURRENCY REGULATION IN NIGERIA

Global trends, technological breakthroughs, and changes in domestic and international regulations will all likely impact how cryptocurrency legislation develops in Nigeria in the future. Many nations are working hard to create cryptocurrency regulations to solve issues like financial stability, consumer protection, and money laundering. Nigeria may draw inspiration from these international trends and modify laws to fit its unique social and economic circumstances.

There are benefits and drawbacks to the swift development of cryptocurrencies and blockchain technology. It will be necessary for regulatory organisations like the CBN to keep up with technological developments if they are to oversee and control the cryptocurrency market successfully. By giving marginalised communities access to financial services, cryptocurrencies have the potential to improve financial inclusion. Nigerian regulators might consider this when creating laws to balance innovation and consumer protection. Nigeria might work with regulatory agencies and international organisations to develop unified cryptocurrency regulations. This has the potential to improve global collaboration and reduce regulatory arbitrage.

CONCLUSION

In conclusion, Nigeria's legal and cryptocurrency landscapes are dynamic, with new legal nuances, regulatory obstacles, and changing viewpoints. Policymakers need to act quickly to create regulatory frameworks that are transparent, uniform, and flexible as cryptocurrencies continue to gain traction and acceptance among the general public. By doing this, Nigeria can protect its financial system and advance equitable economic growth in the digital era while using blockchain technology's transformative potential.

Ikeola Atilola

NIGERIA LICENSING ROUND

Nigeria licensing round refers to the process by which the Nigerian government offers oil blocks to companies for exploration and production. The purpose of the licensing round is to attract investment and boost the country’s oil and gas industry. The licensing round serves as an opportunity for companies to acquire licenses for specific areas known as oil blocks, where they can carry out exploration and production activities.

In Nigeria, the petroleum sector is divided into three main sectors: upstream, midstream and downstream. The upstream sector involves exploration, drilling and production of crude oil and natural gas. The midstream sector focuses on transportation, storage and processing of petroleum products, while the downstream sector involves refining crude oil into various petroleum products as well as distribution and marketing of these products to consumers.

On the 7th of May 2024, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) through its Chief Executive announced the commencement of the 2024 Licensing Round at the just concluded Offshore Technology Conference in Houston, Texas.[i] This body has the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines in the upstream sector. The body is also responsible for the supervision of all Upstream Petroleum operations carried out under licences and leases in the country. 

Read more: Nigeria Launches 2024 Licensing Round for Oil Blocks