The Federal Government of Nigeria has filed criminal charges against four Nigerian crypto dealers and several firms over allegations of conducting the business of other financial institutions without a valid banking license, including USDT to Naira transactions.
The individuals—Ejiogu A. Chinedu, Nnamdi F. Okereke, Oty Ugochukwu Stanley, and Chukwuebuka F. Ogumba—along with some firms listed as their co-defendants, were sued by the FG in various charge sheets and suit numbers exclusively seen by Nairametrics.
In the charges, the government is asking the Federal High Court in Abuja to punish the defendants for allegedly violating the Banks and Other Financial Institutions Act of 2020.
Alleged Unauthorized Crypto Dealings
Nairametrics had earlier exclusively reported that Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), on September 4, 2024, secured an order from the Federal High Court to freeze N548.6 million in bank accounts belonging to suspected crypto users on platforms like ByBit, KuCoin, and others, based on their alleged role in naira fluctuations.
- EFCC counsel, Ekele Iheanacho, urged the court to freeze the bank accounts listed in its schedule, which belong to various individuals, some of whom are either currently being prosecuted or investigated for unauthorized foreign exchange dealings, money laundering, and terrorism financing, pending the conclusion of the investigation and prosecution.
- The development follows intelligence from the National Security Adviser, which alleged money laundering, foreign exchange contraventions, and terrorism financing activities on certain cryptocurrency exchange platforms.
- In charges filed between June and July 2024, the defendants were accused of conducting the specialized business of another financial institution without a valid license, thereby committing an offense between 2021 and January 2024.
- The prosecution also stated that the defendants, not being authorized dealers in Nigeria’s Autonomous Foreign Exchange Market, allegedly negotiated United States Dollar Tether (USDT) against Naira with the public, thereby committing an offense contrary to and punishable under Section 29(1)(c) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.
The act referred to describes any foreign exchange negotiation not permitted by law as an offense.
USDT refers to Tether, a cryptocurrency pegged to the U.S. dollar.
Some of the firms listed as co-defendants include Egomsinachi Road Autos, Plip Global Ventures, and Paparaxy Global Ventures.
The legal teams of both the prosecution and defendants will now present their arguments in court, eventually paving the way for a judgment.
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The case stems from the EFCC’s ongoing investigation, which revealed that several bank accounts are linked to individuals allegedly using virtual cryptocurrency exchange platforms to manipulate the value of the naira illegally and launder proceeds from unlawful activities.
- The EFCC had previously filed a motion before Justice Nwite to preserve the accounts and funds in the identified bank accounts pending the conclusion of the investigation and prosecution.
- The court granted an interim order freezing over 1,000 accounts listed in the EFCC’s motion filed on April 24, 2024, for a period of ninety days, commencing from April 25, 2024, to July 23, 2024.
- An affected party later applied to have several of the freezing orders lifted, and the court granted the request.
- However, the EFCC filed a fresh motion to freeze certain bank accounts and continue its investigation, having filed criminal charges against some operators of the accounts.
This motion was granted by the court on September 4, 2024.
