Serah Onyeche Sanni[1]

Abstract

The wide spread in the acceptance of crypto currencies across the globe has over time projected certain ambiguities in areas surrounding its usage, operations and regulation. A peculiar feature of crypto currency transactions is that they are operated through the use of cryptography (secret codes). The regulation of crypto currency varies based on different countries, while its status remains unidentified in some jurisdictions, others attempt its regulation based on what they categorize crypto currencies to mean. Although, most countries do not make the usage of crypto currencies illegal, its status as currency varies in line with different regulatory implications. The absence of a specific dedicated central authority and regulation, which supervises activities and transactions involving the use of crypto currencies makes it vulnerable to exploitation for illegal purposes such as economic crimes.

This paper aims to identify and review the legal policies surrounding the use of crypto currencies in a number of jurisdictions, particularly in Nigeria. The past recent years have seen crypto currencies become ubiquitous prompting most national and regional authorities to grapple with a suitable form of regulation or supervision. The expansive growth and use of crypto currencies as well as its distinctive features when compared to other legal tender no doubt sparks the need to question its legality. The fluidity of this form of currency creates the need to further beam a search light on its use and operations. Currently, there is no a global movement in terms of setting policies and regulations around the use of Crypto currencies, however, its peculiar nature and features creates a dare need for it.

Introduction

Crypto currency has been defined in a number of related forms. It is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. It has also been defined as digital asset (currency or medium of exchange) that is designed using cryptography, to be secure and anonymous.[2]Decryptionary.com further defined crypto currency as "electronic money created with technology controlling its creation and protecting transactions, while hiding the identities of its users."[3] The seduction of crypto-currency is the convenience in its generation, storage, management and accounting.

It operates based on a technology called ''Blockchain''. Crypto-currencies are largely designed to operate without sovereign regulation and are protected from being discovered by government authorities for supervision[4], this is the major feature directly related to the line of discuss. Crypto-currency does not require any material resources for its production as it is generated through highly encrypted computer programs, stored on computers and its transactions are performed through the Internet. There is no gold or license required to generate crypto currency unlike in other currencies where governments and central banks which require certain security, assets and procedure to follow when deciding how much currency government can print for a state.[5]

Features of Crypto Currencies

The crypto currency market has grown over the years and it keeps expanding as new crypto currencies emerge more frequently. As at August 2018, records revealed the existence of over 1,600 crypto currencies available on the internet. Currently, there are over 2000 crypto currency and virtual currencies, this goes to show the speed at which it grows.

Some major types of crypto currencies include Bit coins, Lite coin, Z cash, Dash, Ripple, Ethereum, NEO, Altcoins and Tether. Bitcoin is widely seen as a pioneer and the most successfully used in the world of crypto currencies. Bitcoin was first made available to the public in 2009, and has ever since expanded by maintaining the highest market capitalization.

Major features associated to crypto currencies include:

Created to be Anonymous: As the name implies, crypto means something concealed in secrecy or hidden. Their operation involves the use of codes in a form known as cryptography.Designed to operate with limited control from the government: Crypto currencies are modeled to operate with absolute independence. No central authority, government or cooperation has access to the funds or personal information of the currency owners.Funds transfer is carried out directly between parties, and in the absence of any third party like a bank or credit card company.



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