Ethiopia’s Financial Intelligence Service Prepares to Regulate Virtual Currencies
Ethiopia’s Financial Intelligence Service is gearing up to regulate virtual currencies, despite their current ban in the country. This move comes as a response to the growing concerns over the illicit use of digital assets in the region.
Collaboration with International Partners
The announcement was made by FIS Director Muluken Amare during a recent meeting of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) in Addis Ababa. The FIS is working closely with international partners, including the United Nations, Russia, and member states of ESAAMLG, to train financial investigators and intelligence units on detecting and responding to illegal activities involving cryptocurrencies.
The focus of the training is to combat issues such as tax evasion, money laundering, and the financing of terrorism, all of which have been facilitated by the use of virtual currencies in the region.
Regional Concerns Over Misuse of Virtual Currencies
Muluken Yirga, a senior legal advisor to ESAAMLG, highlighted the increasing trend of terrorist organizations using virtual currencies to raise and transfer funds. Groups like Al-Shabaab, Al-Qaeda, ISIL, and Daesh have been leveraging digital assets to bypass traditional financial systems, posing a challenge for authorities in tracking and preventing illicit transactions.
“There are different terrorist organizations operating in our region, including Al-Shabaab, Al-Qaeda, ISIL, and Daesh. These groups are increasingly using virtual currencies to raise and transfer funds,” said Muluken.
Enforcement of Existing Regulations
Despite the ban on crypto trading in Ethiopia, some transactions may still be occurring in the country. Amare emphasized that not all virtual currency transactions are necessarily illegal unless they are linked to criminal activities like terrorism financing or fraud.
“… As crypto technology is still new, some transactions may be occurring. That said, it cannot be assumed that all such transactions are illegal. The official currency of Ethiopia is Birr, and any virtual transactions conducted in other currencies are not authorized. If such transactions are linked to crimes such as terrorism or other illegal activities, investigations will be carried out accordingly.”
Future Regulations
Whether virtual currencies are eventually legalized or remain banned, Ethiopian officials are adamant about having mechanisms in place to either regulate them effectively or enforce existing prohibitions. The country is taking proactive steps to address the challenges posed by the use of digital assets in the financial sector.
Stay updated with the latest developments in the crypto world as Ethiopia continues to navigate the complexities of virtual currency regulation.