Why Ethiopia is moving from banning crypto to regulating it
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Loading... - Magdalene Appiah
- 24 Oct 2022
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In June, Ethiopia joined the league of crypto-antagonistic countries when its central bank issued a statement calling crypto transactions illegal and warning people to avoid using them. The bank claimed that only the birr, Ethiopia’s native currency, can be used to settle transactions in the country.
But now, less than three months after that declaration, Ethiopia’s government seems to be having a rethink. Instead of shutting out cryptocurrencies, it wants to regulate the space. Hence, it gave a 10-day ultimatum for cryptocurrency operators to register with the national cybersecurity agency—the Information Network Security Administration (INSA).
This move makes Ethiopia the second African country to reverse a hostile stance on crypto this year. At the end of June, Morocco became the first member of the MENA region to walk back on its crypto ban. Morocco sought to curb social risks like terror financing and money laundering while fostering innovation and consumer welfare.
In Ethiopia’s case, it’s more of a fight against cybercrime and fraud. Through its registration scheme, Ethiopia wants to be the first African country to offer investors protection from criminal crypto enterprises from a cybersecurity perspective. INSA announced in June that it had thwarted 97 per cent of cyber-attacks on various institutions in the country since July 2021, saving the nation $26.3 million.
“There is interest among individuals and entities in providing crypto services including mining and transfer,” INSA said while warning to prosecute players who fail to register.
Cryptocurrency exchanges can become the target of cybersecurity hacks as they process and hold large volumes of digital assets. The most notorious example is the multi-million dollar hack of a Japanese crypto exchange Mt. Gox in 2014. In Dec. 2021, hackers made off with $200 million from Bitmart, another trading platform. The Internet Crime Report by the FBI shows that illicit use of cryptocurrency sits among the top three reported cybercrime incidents globally.
Awareness of cybersecurity is increasing among African countries. Togo makes a notable example of an African nation taking proactive steps to secure cyberspace activity. However, no one has moved their focus to cyber attacks hidden in online crypto marketplaces. Ethiopia wants to lead this front, and it has good reasons — it can’t keep people out of the market. Read More...
