The Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), a top industry body founded, has issued a pioneering Code of Conduct that sets standards for virtual asset service providers operating in the country.

The 11-page document, designed to be voluntarily adopted, covers critical areas like protecting customer data, preventing financial crimes, treating customers fairly, and ensuring operational resilience.

"This Code of Conduct is vital in ensuring a fair, efficient, and transparent virtual assets sector in Nigeria," reads the introduction, framing self-regulation as essential as government oversight lags innovation.

This is coming amid the federal government’s simultaneous embrace and crackdown of crypto. The year kicked off with guidelines from the CBN permitting crypto operators to open bank accounts. But a recent crackdown on crypto—which has Binance at its centre—has continued to blur the nation's stance on the widely growing asset class.

Consumer protection problems around the world

SiBAN is moving proactively to get ahead of issues bedevilling the crypto world globally, particularly for retail investors lured by the asset class' high risk and return potential.

Prominent crypto exchanges like Celsius and Voyager Digital filing for bankruptcy in 2022 left customers unable to access their funds. FTX's collapse from alleged fraud by founder Sam Bankman-Fried wiped out billions.

"We've seen cases globally and in Nigeria where people have lost money, and some actors are simply not playing by the rules," Tage Okogu, CEO of defunct crypto exchange Monexi, told NODO.

"A code of conduct is important for setting clear guidelines of engagement that boost transparency and accountability in the space."

In its Code, SiBAN requires that virtual asset service providers (VASPs) have solid cybersecurity practices, and "know your customer" (KYC) anti-money laundering checks aligned with laws like Nigeria's Cybercrimes Act.

There are also requirements around adequate capital, transparent fee disclosure, and establishing business continuity plans to protect customers if things go awry. It mirrors guidelines issued by global bodies like the Financial Action Task Force on mitigating risks around digital assets.

SiBAN's Code of Conduct is, at best, a first step. Scrutiny will be on whether its members adhere to the guidelines around customer protection and transparency in practice.