NDIC, others warn against investing in virtual currency, rising cybercrime

The Nigeria Deposit Insurance Corporation (NDIC), Access Bank of Nigeria Plc, including  other stakeholders in the financial services industry have expressed fresh concern about  rising cases of cybercrime and the dangers of investing in digital currency (bitcoin). Check this website for Bitcoin Exchanger.

While describing those investing in virtual currency or bitcoins as gamblers, the Deputy Director of Research, Policy and International Relations (RPIR) of the Nigeria Deposit Insurance Corporation (NDIC), Dr Sabo Katata, warned that buying bitcoins  is risky because its transactions are regulated and “the regulators will not come and protect you.”

He spoke at the NDIC workshop for Business Editors and Finance Correspondents, which ended over the weekend in Kano. The 2017 Finance Correspondent Association of Nigeria  (FICAN) workshop was organised by the NDIC.

His words, “Digital currency is for gamblers. If you want to invest in bitcoins you can go ahead, for that is what you are.”

Dr Katata presented a paper, “Financial Disruption of Digital Currency and its Consequences on the Banking System and Deposit Insurance System.”

He noted that even the Bank of England has identified about 70 risks associated with digital currency and warned the Nigerian public against unmitigated risks.

Also, in a paper titled: “Cybercrime: Nature and trends,” a top executive of Access Bank, Pattison Boleigha  advised financial institutions to continuously test, re-test and revise (TRR) their controls, tools and strategies to stay ahead of the criminals in preventing and detecting cybercrimes, especially as cybercrime tactics become more widespread and fatal.

“Cybercrime is definitely becoming tougher to detect. Cyber criminals are trying to stay ahead of the game by coming up with different methods to prevent detection – and that’s definitely going to continue.”

According to him, “The more advanced criminals are becoming, the more advanced solutions need to be as well. There is no one-size-fix-all or quick solution to preventing and detecting cybercrimes, but adoption of  a layered approach in the implementation of controls while striking a balance between service and security can go a long way.”

He further emphasized that virtual currency remains the currency of choice for the payment for criminal products and services in the digital underground economy and the Darkweb. “It has also become the standard payment solution for extortion payments,” Boleigha said.

In his remarks, the Director of RPIR, Alhaji Mohammed Umar Yayangida, stressed that the monetary regulators in Nigeria, namely the NDIC and the Central Bank of Nigeria do not have any control over digital currencies. He added that those who venture into such highly risky investments must note the risks therein.

He revealed that an inter-agency committee has been raised to work on the development in order to respond appropriately to it.

The committee consists of officials from NDIC, CBN, Department of State Services (DSS), Police, Securities and Exchange Commission (SEC).

Meanwhile,  Alhaji Umaru Ibrahim, the Managing Director, Nigeria Deposit Insurance Corporation (NDIC) has urged more collaboration between North-east governors and the CBN to reconstruct financial infrastructure in the Northern region.

The theme of the workshop is, “The Nigerian Banking Sector: Challenges, Opportunities and the Way forward.’’

In order to rebuild financial infrastructure of the region, Ibrahim urged the CBN to provide banking incentives that would lure commercial banks as well as microfinance banks (MFBs) to return to the region.

He called on the CBN to focus on vocational and entrepreneurial trainings for the region to address the unemployment challenges.

“We need to have the government of the North-East on board, they need to be sensitised on this issue.

“We need more collaboration with the CBN and government of the North-East because without this, not much can be done.

“It is necessary for the CBN to provide incentives for various banks in order to come back to the North-East because many bank CEOs have forgotten the potential that exist in this region,’’ Umaru said.

In his presentation entitled, “Rebuilding Financial Infrastructure in the North East”, the Director, Development Finance, CBN, Dr Mudashiru Olaitan lamented the low level of access to the bank’s interventions in the region.

Olaitan was represented by the Deputy Director in the Department, Mr Sani Mohammed.

According to Olaitan, of the N82 billion expended between 2001-2008 no state in the region accessed the Apex Banks’ interventions.

“In the commercial agricultural scheme intervention by the CBN, no state in the North East accessed this intervention except in Taraba and Gombe which have only one each. So, there is need for the region to tap into the interventions,” he started.