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It’s Graduation Week at Tekedia Institute; Join Us And Celebrate

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Graduation week tekedia mini-MBA

Good People, it’s graduation week at Tekedia Institute and Tekedia Mini-MBA edition 12 will conclude this week. It has been a great academic excursion on the mechanics of market systems. Yes, over the last 13 weeks, more than 80 faculty members have led those excursions across different business topics and domains.

We have mastered the fundamental constructs of business, and acquired skills and knowledge from executives in leading global and local companies, on innovation, business growth and operational execution.

For this week’s Live sessions, we will begin with “The Journey to Growth” on Tuesday, to be followed by “The Call to Business Execution” on Thursday. On Saturday, we will have the grand finale with “Unlocking The Era of Opportunity”. Yes, opportunities everywhere; let’s go and unlock them. Zoom links in the Board. I will lead all the sessions this week.

The #knowledge of a people is the #wealth of a people. To our co-learners, graduating this week, you are #ready2lead . To experience our quality and join the next edition of Tekedia Mini-MBA which begins in Feb 2024, go here and register.

Fintech Startup Peloton Technologies Closes $2 Million Seed Funding to Simplify Payments For SMEs

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Fund, money cash dollar

Canadian-based Fintech startup Peloton has closed a $2 million seed funding to simplify the traditionally complicated workflows faced by Small and Medium Sized Enterprises (SMEs).

Executive Chair of the Board, Peloton Technologies, John Mackinlay, disclosed that the seed will be very instrumental in the company’s acquisition strategy and a strong catalyst to its organic growth initiatives.

In his words,

“We’re thrilled with the response from the private investor community. We have a world-class group of investors with a deep background in payments, banking, risk management, accounting, compliance, IT architecture, and securities law. This capital is instrumental to our acquisition strategy and a catalyst for our organic growth initiatives. It is a precursor to a larger capital raise planned for Q1/Q2 of 2024”.

Peloton’s $2 million seed round is coming weeks after it acquired British Columbia-based payment processing startup, KIS Payments, in October this year. The acquisition of KIS payments expanded Peloton’s client base and sales teams, allowing the startup to rapidly scale the delivery of its innovative service offerings.

Founded in 2011, Peloton Technologies is one of the leading Canadian Fintech providing small and medium-sized enterprises with access to the global market.

The platform hosts what it calls a unified SaaS payments platform that allows users and merchants to process, complete transfers, exchange currency, and store payment data all in one place.

Peloton makes it simple to transfer funds between organizations, make payments to  suppliers, and enables users to deposit and withdraw funds from their financial institutions.

Notably, the Peloton Portal provides an overview of all users accounts with a new and enhanced interface. Everything was redesigned in a way to give them quicker and more intuitive access to their  payment tools.

The portal also offers new reporting tools and better user management for companies, to allow them to provide the right access to each member of their team.

A single Peloton Account can support charging users Amex credit card, sending electronic funds transfers (EFT) and wire transfers, and even handling currency conversations when paying foreign currency invoices. The startup also supports bill payment for payments to government bodies. Support for credit and debit with all major card brands include Visa, Mastercard, American Express, Discover, and JCB.

With rapid growth in their goal, Peloton recently acquired an ISO (Independent Sales Organization) and rolled their merchant services operations into their sales team.

The new investment bolsters Peloton’s growth strategy through the acquisition of additional ISOs. Acquiring ISOs has expanded Peloton’s client base and sales operations, expediting the delivery of their innovative service offerings.

CBN Recapitalization and Implications of $1 trillion GDP target for Nigerian Economy

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The Central Bank of Nigeria (CBN) has announced a new plan to recapitalize the banking sector in order to support the country’s economic growth and development. The CBN governor, Yemi Cardoso, said that the recapitalization exercise would enable the banks to provide more credit to the productive sectors of the economy and help achieve the target of $1 trillion gross domestic product (GDP) by 2025.

According to Cardoso, the current capital base of the banks, which was set at N25 billion in 2004, is no longer adequate to meet the challenges and opportunities of the 21st century. He said that the CBN would soon release a new circular that would specify the minimum capital requirements for each category of banks, taking into account their size, scope and risk profile.

Capital adequacy is the measure of the financial strength and resilience of a bank or a financial institution. It reflects the ability of the institution to absorb losses and meet its obligations to depositors and creditors. Capital adequacy is also important for maintaining public confidence and promoting financial stability.

CBN current capital base in Nigeria

The CBN has issued various guidelines on the minimum capital requirements and buffers for different categories of banks and financial institutions in Nigeria. These guidelines are based on the Basel III standards, which are the global best practices for banking supervision and regulation.

The Basel III standards aim to improve the quality and quantity of regulatory capital, enhance risk coverage, introduce leverage ratio, liquidity standards and capital buffers. The CBN has adopted these standards with some modifications to suit the Nigerian context.

The CBN has also revised its guidelines on regulatory capital from time to time, in response to changing economic conditions and emerging risks. The latest revision was in September 2021, when the CBN issued the Guidelines on Regulatory Capital for Deposit Money Banks (DMBs).

According to these guidelines, the minimum capital requirements and buffers for DMBs are as follows:

Common Equity Tier 1 (CET1) ratio: 4.5%.

Tier 1 capital ratio: 6%.

Total capital ratio: 10%.

Capital conservation buffer: 2.5%.

Countercyclical buffer: 0 – 2.5%.

Higher loss absorbency for Domestic Systemically Important Banks (D-SIBs): 1 – 3.5%.

The CET1 ratio is the ratio of a bank’s core equity capital to its risk-weighted assets. Core equity capital includes common shares, retained earnings and other reserves. Risk-weighted assets are the total assets of a bank adjusted for their riskiness according to predefined weights.

The Tier 1 capital ratio is the ratio of a bank’s Tier 1 capital to its risk-weighted assets. Tier 1 capital includes CET1 and additional Tier 1 capital. Additional Tier 1 capital includes instruments that are perpetual, non-cumulative, subordinated and have loss absorption features.

The total capital ratio is the ratio of a bank’s total regulatory capital to its risk-weighted assets. Total regulatory capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital includes instruments that are subordinated, have a minimum maturity of five years and have loss absorption features.

The capital conservation buffer is an additional buffer above the minimum capital requirements that banks are required to maintain during normal times. The buffer is designed to ensure that banks have enough capital to absorb losses during periods of stress without breaching the minimum requirements.

The countercyclical buffer is an additional buffer that varies according to the credit cycle. The buffer is designed to mitigate the procyclicality of the banking system, by requiring banks to build up capital during periods of excessive credit growth and release it during periods of credit contraction.

The higher loss absorbency for D-SIBs is an additional buffer that applies to banks that are identified as systemically important for the domestic economy. The buffer is designed to reduce the probability and impact of failure of these banks, by requiring them to hold more capital than other banks.

The CBN has also set different minimum capital requirements for other categories of financial institutions in Nigeria, such as microfinance banks (MFBs), primary mortgage banks (PMBs), non-interest banks (NIBs) and development finance institutions (DFIs).

According to a report by Pulse Nigeria, the minimum capital requirements for MFBs are as follows:

Unit MFBs: N200 million by April 2020 and N250 million by April 2021.

State MFBs: N1 billion by April 2020 and N1.5 billion by April 2021.

National MFBs: N3.5 billion by April 2020 and N5 billion by April 2021.

According to a report by Naija News, the CBN has proposed a new minimum capital requirement of N100 billion for commercial banks with international license, while retaining the existing requirements of N15 billion for regional license and N25 billion for national license.

The CBN monitors and enforces compliance with these minimum capital requirements and buffers through periodic prudential returns, on-site examinations and off-site surveillance. The CBN also imposes sanctions on non-compliant institutions, such as restrictions on dividend payments, lending activities and expansion plans.

The CBN’s guidelines on regulatory capital are aimed at enhancing the soundness and stability of the Nigerian banking system, as well as aligning it with the global best practices. The CBN expects banks and financial institutions to comply with these guidelines and maintain adequate capital at all times.

The CBN governor also said that the recapitalization exercise would be done in a gradual and phased manner, giving the banks enough time to comply with the new standards. He assured the public that the CBN would continue to monitor the financial soundness and stability of the banks and intervene when necessary to protect depositors’ funds and ensure financial system stability.

The recapitalization plan is part of the CBN’s five-year policy thrust, which aims to foster a more inclusive and sustainable economic growth, enhance financial inclusion and access to credit, improve payment system efficiency and security, and strengthen the regulatory and supervisory framework for the banking sector.

Notable Provisions Of The Evidence (Amendment) Act of Nigeria

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The Evidence (Amendment) Act was passed into law in 2023 to serve as an amendment of its principal act being the Evidence Act of 2011. The notable provisions of this amendment act will be forming the focus of this 2-installment article series.

Amendment of Section 84  :-

– In subsection 2(a), by inserting after the word “document”, the words “or electronic records”.

– In subsection 2 (b), by substituting for paragraph (b), a new paragraph “(b)” –

“(b)That during the period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary cause of the activities”.

– In subsection (2)(c), by inserting after the word “document”, the words “or electronic records”.

– In subsection (2)(d), by inserting after the word “statement”, the words “or electronic records”.

– In subsection (4)(a)&(b) by inserting after the words “document”, the words “or electronic records”.

– In subsection (5)(c), by inserting after the word “document”, the words “or electronic records”. 

Insertion of new Sections 84a-84d :– 

84A(Information in Electronic Form) : Where any law provides that information or any other matter shall be in writing or in the typewritten or printed from, then notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied if such information or matter is :

a). rendered or made available in electronic form, and

b). accessible so as to be usable for a subsequent reference.

84B(Records In a Computer To be Admissible) – Notwithstanding anything contained in this act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media or cloud computing or database produced by a computer shall be deemed to also be a document, if the conditions mentioned in this section are satisfied in relation to the information and computer on question and shall be admissible in any proceeding, without further proof or production of the original, as evidence or any contents of the original or if any fact stated in it of which direct evidence would be admissible.

84C(Authentication of Electronic Records) :-

  1. Any person may authenticate an electronic record by affixing his digital signature on it.
  1. A person may authenticate any electronic record by such digital signature or electronic authentication technique which- 

a). is considered reliable, or

b).may be specified by this act.   

– Any digital signature or electronic authentication technique will be considered reliable if – 

a). The signature creation data or the authentication data are, within the context in which they are used, linked to the signatory or , as the case may be, the authenticator and of no other person.

b). Any alteration to the digital signature made after affixing such signature is detectable.

c). Any alteration to the information made after its authentication by the digital signature is detectable.

d). It fulfills other conditions which may be prescribed.

84D(Proof of Digital Signature):- Except in the case of a secure digital signature, if the digital signature of any person is alleged to have been affixed to an electronic record, the fact that such digital signature is the digital signature of the person must be proved.

– A digital signature shall be deemed to be secure if tjr signature creation data – 

a). at the time of affixing the signature, was under the exclusive control of the signatory and no other person, and

b). was stored & affixed in such an exclusive manner as may be prescribed.

Amendment of Section 93 :- In subsections (1) -(3), by inserting after the words “electronic signature” , the words “or digital signature”.

Substitution for Section 108 :-

Affidavit to be filed

– Before an affidavit is used in court, the original is to be filed in the court & this original or an office copy shall be recognized for any purpose o

In the court.

– However, where this affidavit is deposed electronically before any person duly authorized to take affidavits, a copy shall be filed at the court registry and may be recognized for any purposes in the court.

Section II

This second article will be focused on the last amendments to the principal act being the Evidence Act 2011. 

Amendment of Section 109 :– This provision of the principal act is amended by inserting after the word “Nigeria”, the words “Whether in person or through audiovisual means”. 

Amendment of Section 110 :- This  provision of the principal act is amended by inserting after the word “Nigeria”, the words “whether in person or through audiovisual means”. 

Amendment of Section 119 :- Section 119(2) of the principal act is amended by inserting after paragraph (b), a new paragraph (ba) –

“(ba)If the affidavit is taken via audiovisual means, then the electronic record shall state which audiovisual method was used and the date on which it was used”. 

Substitution of Section 255 :-  

-The Minister of Justice may take regulations generally prescribing further conditions with respect to admissibility of any class of evidence that may be relevant under the act.  

– Where a law provides that a rule, regulation, notification, or any other matter be published in the Federal Government gazette, the requirement shall be deemed to have been satisfied if the rule, regulation, notification, or any other matter is published in the Federal Government gazette or electronic gazette.

Amendment of Section 258 :- 

– Audiovisual communications – means being able to see, hear and communicate with another individual in real time using electronic means. 

– Cloud computing- means the delivery of different services through the internet, including data storage, servers, databases, networking and software. 

– “Computer” means any device for storing and processing information, including mobile phones, and any reference to information being derived from it by calculation, comparison or any process.

– “Magnetic media” includes cassette tapes, hard disks, floppy disks, video & computer tapes. 

– “Digital signature” means an electronically generated signature which is attached to an electronically transmitted document to verify its contents and the sender’s identity.

The US Government’s Crypto Seizures

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Crypto theft may not be as lucrative as it seems. In fact, it could be a very risky and costly endeavor for the perpetrators. This is because the US government has the power and the means to track down and seize the ill-gotten digital assets, as it has done in several high-profile cases. As a result, the US government has become one of the biggest holders of bitcoin and other cryptocurrencies in the world.

We will explore some of the recent examples of how the US government has confiscated millions of dollars’ worth of crypto from hackers, scammers and criminals. We will also discuss some of the challenges and implications of this practice for the crypto industry and the legal system.

The US government’s crypto seizures

One of the most notable cases of crypto seizure by the US government occurred in November 2020, when the Department of Justice (DOJ) announced that it had seized over $1 billion worth of bitcoin from an unnamed individual who allegedly hacked the Silk Road, a notorious online marketplace for illegal goods and services that was shut down in 2013.

The DOJ claimed that the hacker, known as Individual X, had stolen the funds from Silk Road’s founder, Ross Ulbricht, who is currently serving a life sentence for his role in the operation. The DOJ said that it was able to trace and seize the funds using a third-party company that analyzes blockchain transactions.

Another prominent example of crypto seizure by the US government happened in June 2021, when the DOJ announced that it had recovered $2.3 million worth of bitcoin from a ransomware group called DarkSide, which had attacked Colonial Pipeline, a major US fuel supplier, and demanded a ransom of $4.4 million in bitcoin. The DOJ said that it was able to locate and access the private key to a bitcoin wallet that contained most of the ransom payment, thanks to the cooperation of Colonial Pipeline and law enforcement partners.

A third example of crypto seizure by the US government took place in July 2021, when the DOJ announced that it had seized over $19 million worth of bitcoin from two Iranian nationals who were accused of running a sophisticated ransomware scheme that targeted hundreds of victims, including hospitals, municipalities and public institutions. The DOJ said that it was able to identify and freeze the funds using blockchain analysis tools and international cooperation.

The challenges and implications of crypto seizures

While these cases demonstrate the US government’s ability and willingness to crack down on crypto-related crimes, they also raise some questions and concerns about the legality, transparency and fairness of this practice.

One of the main challenges is how to determine the ownership and value of seized crypto assets. Unlike traditional assets, such as cash or property, crypto assets are not issued or controlled by any central authority. They are decentralized and distributed across a network of computers that validate transactions using cryptography. Therefore, it is not always clear who owns, or controls a given amount of crypto assets, especially if they are stored in anonymous or encrypted wallets or transferred across multiple jurisdictions.

Another challenge is how to dispose of seized crypto assets. Unlike traditional assets, such as cash or property, crypto assets are volatile and subject to market fluctuations. They can appreciate or depreciate significantly in a short period of time. Therefore, it is not always clear when and how to sell or auction off seized crypto assets, especially if they are subject to legal disputes or claims by third parties.

A third challenge is how to balance the interests and rights of different stakeholders involved in crypto seizures. These include the victims of crypto-related crimes, who may seek restitution or compensation; the perpetrators of crypto-related crimes, who may contest or appeal their charges or sentences; the US government, which may seek to deter or punish criminal activity or generate revenue; and the crypto industry and community, which may seek to protect their privacy, innovation and autonomy.

These challenges pose some ethical and legal dilemmas for the US government and its agencies. For instance:

Should the US government disclose how it tracks and seizes crypto assets? If so, how much detail should it provide? If not, how can it ensure accountability and oversight?

Should the US government sell or auction off seized crypto assets as soon as possible or hold them until legal proceedings are concluded? If so, how should it determine the best timing and method? If not, how should it manage the risks and costs of holding them?

Should the US government return seized crypto assets to their original owners or use them for other purposes? If so, how should it verify and compensate the rightful owners? If not, how should it allocate and distribute them?

These questions have no easy answers. They require careful consideration and consultation among various stakeholders and experts. They also require clear and consistent policies and regulations that balance security, justice and innovation.