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This paper aims to unveil the darker side of cryptocurrencies by delving into its role as an obstacle to investments in Middle East and African (MEAs) countries, unravelling the challenges involved. Indeed, despite the rise of blockchain-related technologies, specifically cryptocurrencies, having undeniably unlocked new avenues for business and society, crypto for venture funding purposes may exhibit a “dark side” due to their use for unethical purposes, for example, money laundering or terrorism financing, largely diffused in certain areas of MEA countries.

Through an explorative research design, using a mix of techniques based on both qualitative and interpretive methods, we conducted in-depth interviews among 33 European managers of companies engaged in MEA markets or aspiring to invest in such foreign markets, to analyse their thoughts, perceptions and possible strategies concerning the management of the “dark side” of cryptocurrencies in MEAs.

Our investigation unearthed seven pivotal issues, which manifest as significant barriers related to the ambivalent use of crypto for funding projects, encompassing seven important consequential elements: (1) lack of knowledge about the technology’s potentialities; (2) perceptions of crypto technology’s ambivalence; (3) reputation and image consequences; (4) uncertainty about the destination of the invested funds; (5) decreased attractiveness of MEAs; (6) competition and market; and (7) lack of control and regulation. We grouped these into technology-related, business-related and legal- and policy-related barriers. Such findings underline the probable decrease in attractiveness of MEAs in terms of investments, together with the triggering factors and potential strategic solutions to mitigate such circumstances.

Future studies could explore a broader sample of managers since we only considered the perception of European managers operating in companies that invest (or are intending to invest) in MEAs. Moreover, future research may extend the analysis to MEA-native companies or those engaging in reciprocal exchanges with Western countries.

Practically, our findings suggest several elements in which to intervene to mitigate managers’ negative perception of the unethical use of cryptocurrencies in MEAs and to support CEOs’ and CFOs’ strategies, together with requirements to ensure the unaltered attractiveness of investments in an otherwise thriving region of the world, without overlooking the protection and safeguarding of investments and the health of the market and competition. Furthermore, a call for future research in this domain, along with at least minimal regulatory mechanisms, clearly emerges.

Our findings underline the social challenges associated with the perception and acceptance of cryptocurrencies in these contexts, influencing cultural and social dynamics. Moreover, the identification of these barriers could underscore the significance of awareness of and education on blockchain technology and cryptocurrencies within society, including implications for policymakers.

Despite prior investigations into the negative effects of cryptocurrencies as a form of venture funding, no studies to date have examined managers’ perceptions by focusing on possible barriers to investment in MEA countries due to the unethical usage of crypto. Importantly, this paper unravels the unexplored complexities of crypto’s impact on ethical investments in MEAs, showcasing an original perspective.

We investigate how existing investment in strong external corporate governance mechanism—use of Big 4 audit firms—affect compliance with corporate governance audit (CGA) regulation in Nigeria and Kenya. While both countries are characterized by weak enforcement, they differ in their corporate governance audit regulatory strategies.

The study adopts neo-institutional theory as a theoretical framework and uses logit and probit models and generalized estimating equations as empirical models to test the hypotheses developed.

The study finds that persuasive coercive isomorphism provides reputational benefits to clients of multinational audit firms in Kenya and encourages them to conduct and report their CGA. In Nigeria, clients of multinational audit firms are less likely to conduct CGA as there is no persuasive coercive isomorphism in place. We also find many internal corporate governance variables to positively influence CGA.

The success of any regulation is dependent on the level of compliance by regulated entities. As clients of multinational audit firms usually have the motivation and resources to employ such high quality audit firms, it is expected that if they are well motivated, they will commit similar level of resources to conducting CGA. In Nigeria, the Financial Reporting Council should develop some persuasive measures to encourage clients of multinational audit firms to conduct CGA. In both Nigeria and Kenya, enforcement of internal corporate governance frameworks should be strengthened.

This is the first study to explore how regulatory strategies affect strategic responses of regulated entities to CGA regulation, introducing a new dimension to the ESG literature.