The Blockchain Industry Coordinating Committee of Nigeria (BICCoN), released a press statement, condemning the recent ‘overreach’ of the Central Bank of Nigeria.
Recall that the CBN instructed banks to stop processing cryptocurrency transactions in February 2021. The CBN again recently instructed Nigerian banks to block, close and freeze bank accounts of individuals who are suspected to be engaging in crypto-related transactions in the country.
According to the press release, the BICCoN explained that the recent actions taken by the financial regulator and banks operating in the country are ‘questionable.’ It reads, “We consider questionable, the actions of deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs) blocking, closing, and/or freezing the bank accounts of individuals and entities by the mere fact that these individuals and entities are involved in cryptocurrency trading or cryptocurrency-related transactions without more.”
What you should know
The BICCoN claims to be an intercommunity working group, which began operating on January 28, 2021. The mandate of the group came as a result of the need to check the proliferation of crypto scams in the industry.
BICCoN is constituted by the three major blockchain bodies/communities in Nigeria, which are the Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) and independent stakeholders who may not yet be affiliated with any of the three blockchain bodies/communities.
The press release explained that the current actions of the financial regulator and banks operating in the country are not supported under the current laws of the Federal Republic of Nigeria. It reads, “Affected individuals and entities are advised to seek legal advice for the purpose of evaluating the individual circumstances of their cases.”
The association also advised affected individuals to take legal actions against these organizations in situations where individual rights have been infringed upon. They said, “Where it is advised that their right has been infringed upon without legal justification, legal redress should be sought in our courts accordingly. Nigeria is governed by laws. All agencies, bodies, institutions, and organizations, whether public or private, are expected to be subject to the rule of law.”
The press release also emphasized the position the association took in February, when the CBN banned DMBs, NBFIs and OFIs from providing banking and other financial services to persons and/or entities transacting in cryptocurrency or operating cryptocurrency exchanges within their systems. It reads, “We restate the same position we took in our 13 February press release when we maintained that the Central Bank of Nigeria (CBN) has by its 5 February circular on cryptocurrency overstepped its statutory bounds and should review its step.”
The press release also referenced the January 12, 2017, circular, where the CBN ‘permitted’ banks to offer their services to cryptocurrency-related transactions, stating that the circular issued in February 2021 is not just a mere reiteration. It stated, “The CBN permitted these DMBs, NBFIs, and OFIs to provide banking services and other financial services to virtual currency exchangers/customers subject to ensuring that these exchangers/customers have effective Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) controls that enable them comply with customer identification, verification, and transaction monitoring requirements.”
As required in that circular, it is only when banks and other financial institutions are dissatisfied with the controls put in place by the virtual currency exchangers/customers should the customer relationship be discontinued immediately.
The press release went further to explain that the association will ‘maintain’ its earlier position that the CBN is encroaching on the law-making powers of the National Assembly, contrary to the provisions of chapter 4 of the 1999 Constitution of the Federal Republic of Nigeria (as amended). It further reads, “There is currently no legislation by the National Assembly criminalizing or illegalizing trade in cryptocurrency in Nigeria. Therefore, it is questionable whether the CBN has the statutory power to order the (permanent) freezing [or closure] of these accounts.
“Besides, Nigeria’s money laundering and anti-terrorism laws contemplate the freezing of individual or specific accounts, not a blanket closure of the accounts of a set of persons, entities, or entire industry by virtue of their involvement in cryptocurrency trading or services, a lawful business. If the CBN’s circular is not reviewed, it will set a dangerous precedent in the country.”
Due to this recent development, the association is introducing a “5-point Crypto Advocacy Agenda in Nigeria. (5 CAAN).” The association explained that they will be engaging 5 major stakeholders in their pro-crypto adoption campaign. The players include the Presidency, the Finance Minister with the Ministry of Finance, Budget and National Planning, the law enforcement agencies, the National Assembly and the courts.