The Central Bank of Nigeria (CBN) has instructed banks to freeze accounts involved in cryptocurrency transactions and has banned regulated financial institutions from accepting digital currency payments. Meanwhile, platforms like Binance are under government investigation for possible breaches of regulations.
The Central Bank of Nigeria (CBN) has told banks and financial institutions to find anyone or any businesses linked to transactions with cryptocurrency exchanges. According to the CBN, these accounts should be frozen for six months with a Post No Debit (PND) instruction.
Central Bank’s Measures Against Crypto Transactions in Nigeria
Under the “Post No Debit instructions,” customers are restricted from certain transactions, such as withdrawing funds or making payments. In response, the CBN issued a circular identifying Bybit, KuCoin, OKX, and Binance as crypto exchange platforms operating without licenses in Nigeria.
The CBN is determined to crack down on individuals trading Tether USDT illicitly on these platforms, especially through peer-to-peer (P2P) channels.
Additionally, the CBN stated that regulated financial institutions are barred from accepting or facilitating cryptocurrency payments. This stance contradicts a prior ban lifted in December 2023, allowing banks to facilitate crypto exchange transactions.
Due to the rapid depreciation of the naira and a surge in inflation reaching 29.9%, the government has turned its attention to platforms facilitating cryptocurrency transactions.
Recent actions have been taken against crypto trading platforms, particularly those known for valuations differing from the CBN Naira rate. Notably, Binance has faced increased scrutiny following allegations of questionable financial transactions conducted through Binance Nigeria in 2023.
Regulatory Issues Plague Binance in Nigeria
CBN Governor Olayemi Cardoso disclosed that approximately $26 billion flowed through Nigeria via Binance in 2023, originating from undisclosed sources and users. This has raised concerns about potential regulatory breaches within the crypto ecosystem.
Binance’s challenges in Nigeria persist as Tigran Gambaryan, a US-based Binance executive, has been apprehended. Gambaryan faces five charges related to money laundering following discussions between Nigerian officials and Binance regarding regulatory issues.
Additionally, Nadeem Anjarwalla, another executive involved in regulatory discussions with Nigerian authorities, managed to evade custody but was later traced to Kenya. Anjarwalla now faces potential extradition back to Nigeria to address the charges against him.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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