Nigeria’s central bank denies directive to freeze digital asset bank accounts

Getting your Trinity Audio player ready...

The Central Bank of Nigeria (CBN) has denied issuing a directive to local lenders to identify and freeze digital asset-related accounts.

Multiple news outlets recently reported that several market players in the banking and payments industry had received the order to place a ‘Post No Debit’ hold on all accounts linked to digital currency activity.

“The Bank hereby wishes to remind regulated institutions that dealing in crypto currencies or facilitating payments for crypto currency exchange is prohibited,” part of the directive reportedly stated.

It went on to order the financial institutions to identify all individuals and entities transacting with Binance, KuCoin, OKX, and Bybit exchanges and place the ‘Post No Debit’ instruction for six months.

A Post No Debit instruction prevents an account from any outflows, including payments, withdrawals, or transfers.

The directive further pointed out that the four exchanges, and others not on the list, are conducting business illegally in Nigeria and that the EFCC, which cracks down on financial crimes, was investigating most of them.

CBN concluded its directive by pledging to investigate and prosecute all agents enabling the illegal sale and purchase of USDT.

A few hours after the directive started circulating, CBN issued a statement denying its involvement and claimed it was fake. Shortly after, it deleted this denial and reissued it via X.

This information did not originate from the Central Bank of Nigeria. For authentic updates, please visit the Bank's official website at https://t.co/R9TQU0eRpp. pic.twitter.com/f6BNwRab3x

— Central Bank of Nigeria (@cenbank) April 24, 2024

Nigeria has a checkered past with digital assets. For years, CBN banned financial institutions from processing any payments related to digital assets. This changed last December when the bank reversed the ban and introduced new guidelines for lenders dealing with digital assets.

However, the animosity has been reawakened over the past two months as the government cracks down on offshore exchanges for forex manipulation. Nigeria has banned exchanges like Bybit, KuCoin, and Coinbase and has sued Binance for orchestrating a ‘sophisticated heist‘ in its economy.

‘No government will allow ‘crypto’ anarchy’

Despite criticism from some quarters, Nigeria’s Minister for Information, Mohammed Idris, said the government stands by its decision.

“No sovereign country will allow its currency to be toyed with by some operators who are not operating within the confines of the law,” he told the BBC.

The minister added that Binance, in particular, broke several laws in Nigeria. The exchange operated without a license and offered an electronic wallet system without due approval by authorities.

“There’s no government that will allow that,” he said.

Idris dismissed reports that Binance executive Tigran Gambaryan, who is being detained in Abuja, has been treated inhumanely. Gambaryan, who heads the exchange’s financial crime compliance department, sued Nigeria three weeks ago for violating his human rights, but the lawsuit was dismissed by a federal judge in the country’s capital.

Gambaryan was arrested alongside Nadeem Anjarwalla, a British-Kenyan citizen who heads Binance Africa. Anjarwalla escaped detention and was traced back to Nairobi, but conflicting reports have emerged recently on whether he has been arrested.

“The Nigerian government is on his hunt. Interpol has been contacted, and we hope to bring him back to face justice. The other individual who’s here is still answering questions from the EFCC,” Idris stated.

Meanwhile, Nigeria’s digital asset sector hopes that the appointment of a new head of the Securities and Exchange Commission (SEC) will usher in a new era for the industry. Emomotimi Agama, who previously headed the Nigerian Capital Market Institute, has been vocal in his support for digital assets for years.

Watch: Tech redefines how things are done—Africa is here for it