Nigeria’s central bank has frozen the accounts of two individuals and one company that it claims has been allegedly engaging in digital currency trading. The bank claimed that this violated a circular it published in February against Bitcoin trading.
The Central Bank of Nigeria (CBN) issued a ’Post-No-Debit’ circular last week to all commercial banks to shut down accounts of the three entities, the local outlet People’s Gazette reports.
“You are hereby directed to close accounts of the underlisted bank customers and place the funds in the accounts in suspense accounts for engaging in cryptocurrency trading in contravention of CBN Circular BSD/DIR/PUB/014/001 dated February 5, 2021.”
The accounts belong to a firm called TVS Hallmark Service Limited and two individuals—Nwaorgu Kingsley Chibuzor and Nnamdi Francis Okereke. The CBN’s circular was signed by its Director of Banking Supervision J. Y. Mammanand.
In its circular, the central bank referenced a February order in which it directed all banks to shut down accounts used in any digital currency transactions. The February circular specifically urged all financial institutions to “identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”
At the time, Nigeria was witnessing nationwide protests against the Special Anti-Robbery Squad (SARS), which had been accused of unleashing violence against young Nigerians and even killing quite a number of residents for minor offenses. It was alleged that as CBN banned all banking channels to the leaders of the protests, some turned to digital currencies to raise funds for the movement. At the time of writing, it’s not clear how much money was raised through this channel, but it was enough to get the CBN concerned. SARS was eventually disbanded due to the pressure from the protests.
The fresh ban for the three entities comes at a time when digital currency trading in Nigeria is soaring. The West African country leads the continent in trading volume and is one of the biggest P2P markets globally.
Nigeria also launched its eNaira recently, becoming the first country in Africa to have its own CBDC.
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