A significant number of Nigerians linked to crypto trading have allegedly had their bank accounts closed by their respective banks.
This is in lieu of Nigeria’s apex bank directive prohibiting banks and other financial institutions from dealing in crypto-related transactions. The CBN clearly instructed banks to adhere to the directive with immediate effect which has probably led to why such bank accounts were immediately shut down.
According to a text message seen by Nairametrics, a customer affected was told by his bank that in line with the CBN directive on cryptocurrency operation in Nigeria, the individual account was henceforth inactive.
The Chief Executive Officer of Bitfxt Technologies, Franklin Peters also revealed that the business accounts of Bitfxt Technologies, were allegedly closed and its funds wiped off.
So our cooperate accounts have been wiped and closed by our host bank. This is really not the way forward #Nigeria.
— Franklin Peters (Blockchain Oracle) (@F_Peterz) February 10, 2021
In case you missed it
- Recall, in a circular dated 5th February 2021 and distributed to regulated financial firms, the apex bank of Africa’s largest economy warned and reminded local financial institutions against having any transactions in crypto or facilitating payments for crypto exchanges.
- In addition, the apex bank instructed the financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges.
- The Apex bank further warned the Nigerian Financial Stakeholders that any breach of this directive will attract serious regulatory sanctions.
- The CBN released a press statement further justifying its position to the general public and clearly stating that cryptos are issued by unregulated and unlicensed entities which begs the question of legality. It also claimed that cryptocurrencies have been used to finance several illegal activities including terrorism and money laundering.
Can the Nigerian apex bank actually stop trading?
The Nigerian central bank has control over the banking sector and by a large extent can use its powers to determine how banks allow customers to use their bank accounts for transactions.
- While cryptocurrencies are a digital form of currency, it still relies heavily on the regular currencies for everything from pricing its value to how its ownership is being determined.
- To buy cryptocurrencies, you can no longer pay with cash via using your Nigerian bank account.
- Thus, Nigerians looking to trade in cryptocurrency will now have to seek other means outside of the banking sector, assuming Nigerian banks strictly implement the new directives.
What this means
Such a directive from the CBN will have clear negative consequences for the international Crypto community, taking into consideration Nigerian financial ecosystem will remain closed to the Crypto network. This will thereby dampen its use among a growing number of Nigerians who solely depend on their local currency to process their crypto transactions.