‘CBN is overstepping its bounds’- Nigerian blockchain group slams crypto clampdown

Want to invest in crypto in February? Here are 5 options to consider

The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) has described recent actions by the Central Bank of Nigeria imposing a new ban on user accounts tied to crypto-related activity as questionable.

The blockchain collaborative body said this in a news release, criticising the Central Bank of Nigeria’s recent “overreach.”

Recall that in February 2021, the CBN ordered banks to stop processing cryptocurrency-related transactions in the country. 

The Apex body also recently reiterated that individuals suspected of engaging in crypto-related transactions in Nigeria should have their bank accounts blocked, closed, and frozen. 

The CBN will introduce digital currency in Nigeria - Godwin Emefiele
CBN Governor, Mr Godwin Emefiele

According to BICCoN, the central bank’s actions, as well as those of deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs), are questionable.

“We consider questionable the actions of deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs) in 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.”

The Blockchain Industry Coordinating Committee of Nigeria (BICCoN)

The BICCoN, which started operations on January 28, 2021, describes itself as an intercommunity working group. The group’s mandate arose from the necessity to combat the industry’s growing number of cryptocurrency scams.

BICCoN is made up of Nigeria’s three major blockchain bodies/communities: the Blockchain Nigeria User Group (BNUG), the Cryptography Development Initiative of Nigeria (CDIN), and the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). 

The body is also constituted of independent stakeholders who aren’t affiliated with any of the three blockchain bodies/communities.

The press release went on to further state that the current acts of the financial regulator and banks operating in the country are not supported by the current laws of the Federal Republic of Nigeria. 

These Four Startups are Disrupting the Legal services in Nigeria

“Affected persons and companies are urged to obtain legal assistance to evaluate the unique circumstances of their cases.”

The group which has previously spoken out against the CBN prohibiting banks from supporting cryptocurrency transactions in February reiterated that view in this recent press statement.

“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.”

According to the press release, the CBN “permitted” banks to offer their services for cryptocurrency-related transactions in a circular issued on January 12, 2017, and the circular issued in February 2021 is contradictory. 

“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 to comply with customer identification, verification, and transaction monitoring requirements.”

As required by that circular, it is only when banks and other financial institutions are dissatisfied with the controls put in place by virtual currency exchangers that the customer relationship should be promptly terminated.

The press statement went on to say that the group will “maintain” its previous position that the CBN is infringing on the National Assembly’s law-making powers, which is contrary to Chapter 4 of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

“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 industries by virtue of their involvement in cryptocurrency trading or services, which is a lawful business. If the CBN’s circular is not reviewed, it will set a dangerous precedent in the country. “

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!