The purported notice “warned” deposit money banks (DMBs), non-banking financial institutions (NBFIs), other financial institutions (OFIs), and the public about the risks associated with crypto transactions.
Recent reports reported on an alleged notice issued by the Central Bank of Nigeria (CBN). The document warned financial institutions that interacting with cryptocurrencies and facilitating operations for cryptocurrency exchanges was prohibited.
The news raised alarm bells when, four months ago, Nigeria lifted the ban preventing banks and other financial institutions from operating accounts for virtual asset service providers (VASPs).
The Latest Crackdown on Cryptocurrencies Turned Out to be a Hoax
On Tuesday, reports began to spread about the CBN’s intervention into financial institutions that facilitated operations for crypto exchanges in Nigeria. The document “reminded” regulated institutions that they were prohibited from dealing in cryptocurrencies or facilitating exchange operations due to “previous regulatory directives on the subject.”
However, the aforementioned ban was lifted in December 2023 and was followed by strict guidelines that allow banks and other institutions to operate with cryptocurrencies under a set of rules. The purported notice ordered the DMB, NBFI and OFI to identify and report all individuals and entities within their system that were “transacting or operating cryptocurrencies” on the exchanges. Binance, OKX, KuCoin and Bybit were listed as banned platforms.
According to the document, listed exchanges and other platforms that trade the Nigerian naira in the peer-to-peer (P2P) market were not licensed to operate in the country. As such, these platforms were “under investigation” by the CBN and the Economic and Financial Crimes Commission (EFCC).
The notice ordered financial institutions to ensure that accounts handling cryptocurrencies were “placed on PND (Post No Debit) instruction for six months.” Furthermore, it warned that all suspected agents who traded “USDT illegally” could be arrested.
The document stated that any failure to comply with the new directive would result in “severe regulatory sanctions” for the parties involved. However, the Central Bank of Nigeria clarified on Wednesday that the alleged circular was “false content”. In an X publication, CBN stated that the information was not authentic and did not come from the institution.
Nigeria’s EFCC Freezes 300 Accounts
Despite the CBN notice being found to be fake, the EFCC recently froze over 300 illegal forex accounts operating on a P2P platform. According to a local report on Tuesday, the EFCC Chairman, Ola Olukoyede, revealed that the commission suspended the accounts on Monday following a court order.
The president explained that the agency discovered a “worse scheme” than the Binance system, which has been under a regulatory crackdown in the country. The world’s largest cryptocurrency exchange and two of its executives are currently facing four charges of tax evasion in Nigeria.
According to the report, Olukoyede stated that “there are people in this country who are doing worse than Binance.” As a result, these actions were taken to “ensure the security of the foreign exchange market and protect the economy.”
The EFCC considers P2P financial trading to be a “scheme” that operates outside official financial corridors as, in the last year, more than 15 billion Nigerian naira, worth about $11 million, passed through one of the currency platforms.
By Leonardo Perez
