The United States and Nigeria have formed a bilateral liaison group to counter cryptocurrency-related crimes and illegal financing.
An October 23 announcement reaffirmed the United States’ commitment to working closely with Nigeria. The US Department of Justice pledged to support Nigeria in strengthening its capabilities to investigate and prosecute cybercrime.
While the two countries have collaborated on other initiatives in the past, this effort explicitly focuses on crimes involving crypto as both countries have seen substantial crypto adoption. Recent data from Chainalysis shows that Nigeria is the second largest crypto user in the world, making it a leader in digital finance in Sub-Saharan Africa.
Meanwhile, the US has a strong position in North America, driven by significant institutional activity around Bitcoin and Ethereum ETFs.
In recent years, cryptocurrencies have gained popularity worldwide due to their ability to enable cheap and fast cross-border transactions. However, their decentralized and borderless nature poses unique challenges for regulators and law enforcement agencies worldwide as illegal actors seek to use the technology for their illegal activities.
Blockchain analytics platform TRM Labs reported that total illicit funds in the crypto ecosystem have shrunk by 99% year-on-year to $34 billion by 2023.
Tackling crypto-related crimes
The Bilateral Liaison Group will thus serve as a joint platform where both countries can share intelligence, develop coordinated strategies and implement actions to disrupt illicit financial networks.
Furthermore, the focus of the platform will be to strengthen research capabilities, improve intelligence sharing, stimulate regulatory cooperation and promote public-private partnerships.
Through this group, both countries aim to establish regulatory frameworks, implement advanced monitoring tools, build law enforcement capacity and promote public awareness. Using blockchain analytics and other technology, they aim to track and investigate crypto transactions linked to criminal activity.
In addition, the partnership includes training for Nigerian law enforcement and initiatives to educate the public on crypto-related issues.
A successful outcome for the Bilateral Liaison Group could allow the U.S. to forge similar partnerships with other countries.
