Received on 28 March 2024; revised on 07 May 2024; accepted on 10 May 2024 | Ngozi Samuel Uzougbo, Chinonso Gladys Ikegwu, Adefolake Olachi Adewusi
The rise of cryptocurrencies has introduced significant challenges for regulators, particularly in enforcing laws across international borders. The decentralized nature of cryptocurrencies, which operates on a blockchain network, makes it difficult to regulate within traditional legal frameworks. Jurisdictional issues arise when transactions involve parties in different countries, leading to regulatory gaps and enforcement challenges. These challenges can allow illicit activities such as money laundering and terrorism financing to thrive. To address these issues, international cooperation between regulators, law enforcement agencies, and industry stakeholders is essential. Successful examples of collaboration include the Financial Action Task Force (FATF) and the Joint Chiefs of Global Tax Enforcement (J5), which have helped clarify regulatory expectations and promote consistent enforcement efforts. The paper explores the jurisdictional challenges and proposes collaborative solutions, emphasizing the importance of information sharing, joint investigations, and common regulatory standards. It also discusses technological solutions such as blockchain analysis tools, enhanced KYC/AML procedures, and transaction monitoring software to improve enforcement capabilities. Despite challenges such as sovereignty concerns, legal barriers, and resource constraints, the paper concludes that sustained international cooperation and collaborative solutions are crucial for effectively regulating cryptocurrencies and ensuring the integrity of the global financial system.The rise of cryptocurrencies has introduced significant challenges for regulators, particularly in enforcing laws across international borders. The decentralized nature of cryptocurrencies, which operates on a blockchain network, makes it difficult to regulate within traditional legal frameworks. Jurisdictional issues arise when transactions involve parties in different countries, leading to regulatory gaps and enforcement challenges. These challenges can allow illicit activities such as money laundering and terrorism financing to thrive. To address these issues, international cooperation between regulators, law enforcement agencies, and industry stakeholders is essential. Successful examples of collaboration include the Financial Action Task Force (FATF) and the Joint Chiefs of Global Tax Enforcement (J5), which have helped clarify regulatory expectations and promote consistent enforcement efforts. The paper explores the jurisdictional challenges and proposes collaborative solutions, emphasizing the importance of information sharing, joint investigations, and common regulatory standards. It also discusses technological solutions such as blockchain analysis tools, enhanced KYC/AML procedures, and transaction monitoring software to improve enforcement capabilities. Despite challenges such as sovereignty concerns, legal barriers, and resource constraints, the paper concludes that sustained international cooperation and collaborative solutions are crucial for effectively regulating cryptocurrencies and ensuring the integrity of the global financial system.