Nigeria EFCC Chairman: Blockchain and AI can be used to combat illegal activities
Africa loses up to US$88.6 billion annually to illicit financial flows (IFFs), which poses a serious threat to the stability and development of the continent. At the recent Pan-African Conference on Illicit Financial Flows and Taxation in Tunisia, Nigeria’s Economic and Financial Crimes Commission (EFCC) Chairman Olanipekun Olukoyede emphasized that blockchain technology and artificial intelligence (AI) can serve as effective tools in combating illicit financial flows.
Source: X EFCC Chairman Olanipekun Olukoyede stressed that blockchain technology and AI can combat illicit financial flows
Olukoyede said the issue of illicit financial flows can be better addressed through the establishment of a sound legal framework and capacity building at the national, regional and international levels. He pointed out that the use of advanced technologies such as data analysis, blockchain and artificial intelligence can enhance the effectiveness of asset tracking and recovery.
Speaking at the meeting, Olukoyede mentioned that successful recovery of these illicit funds would significantly improve infrastructure, healthcare and education in Africa. He cited the $311 million recovered from the United States in 2020 linked to former Nigerian dictator Sani Abacha as a success story of international cooperation.
Olukoyede particularly emphasized that the fight against corruption requires international pressure to ensure cooperation from tax havens and low-tax jurisdictions, stressing the importance of strong advocacy efforts.
Blockchain and AI applications in Nigeria
Nigeria has recently taken a series of measures to embrace blockchain technology and artificial intelligence. Nigeria’s National Information Technology Development Agency (NITDA) reconstituted the National Blockchain Policy Steering Committee in May to re-evaluate the guidelines guiding the implementation of the country’s blockchain policy. This review is an effort to keep pace with blockchain innovation and drive full adoption and successful execution by involving more stakeholders.
NITDA also advocated in April for the incorporation of artificial intelligence into Nigeria’s security architecture to improve outcomes. Kashifu Inuwa, the agency’s director-general, said the security and IT industries can leverage technologies such as artificial intelligence and the Internet of Things (IoT) to improve the effectiveness of the security sector.
NITDA actively promotes the development of artificial intelligence in Nigeria by establishing the National Center for Artificial Intelligence and Robotics and formulating a national artificial intelligence policy.
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Global Perspective and Future Outlook
Olukoyede’s remarks echoed global demand for the use of advanced technology to combat financial crime. Cryptocurrency and blockchain technologies are increasingly used around the world, providing new means of tracking and recovering illicit funds. According to a report by the United Nations Office on Drugs and Crime (UNODC), the rise of cryptocurrencies and illegal online casinos has fueled underground banking and money laundering activities in Southeast and East Asia.
Source: UNODC’s simplified benchmarking model based on $USDT, which facilitates online gambling and money laundering (left); the simplified $USDT-to-fiat “fleet” model, which facilitates money laundering and underground banks (right)
In Nigeria, the EFCC has launched a crackdown on the use of cryptocurrencies for criminal purposes, blocking 1,146 bank accounts involved in foreign exchange trading, money laundering and terrorism funding. A significant number of these accounts are associated with peer-to-peer cryptocurrency trading platforms, demonstrating the close connection between digital currencies and illegal financial activities.
Olukoyede also mentioned that the EFCC successfully recovered $20 million worth of cryptocurrencies from fraudsters. In an effort to hold cryptocurrency platforms accountable, the EFCC also filed a criminal complaint against Binance, one of the world’s largest cryptocurrency exchanges, accusing it of money laundering and tax evasion.
Overall, Olukoyede stressed that combating financial crime requires strong legal systems, capacity building, and coordination and cooperation at the national, regional and international levels. He advocates the use of advanced technologies such as data analytics, blockchain and artificial intelligence to enhance asset tracking and recovery efforts.
In the future, these emerging technologies may play a key role in combating financial crime facilitated by cryptocurrencies, providing strong support for traditional law enforcement measures. As global attention to financial crime continues to increase, the application of technologies such as blockchain and artificial intelligence will become an important tool in combating illicit financial flows.
