- The defendants are accused of breaking the Banks and Other Financial Institutions Act of 2020
- The government alleged that trading on cryptocurrencies, particularly USDT to naira, amounts to carrying out transactions reserved for banks in the country
- The government, with its recent moves, wants to regulate and tax the market while also clamping down on users it deems dangerous
The Nigerian government has filed criminal charges against four Nigerian cryptocurrency dealers and firms for allegedly trading cryptocurrencies, especially stable coin USDT to Naira transactions.
The government alleged that trading on cryptocurrencies, particularly USDT to naira, amounts to carrying out transactions reserved for banks in the country. Hence, they should have obtained a valid banking license to carry out the transactions. The government therefore argues that by doing so without a valid license, they have broken the law and should be punished.
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 charged in various charge sheets, according to Nairametrics.
The defendants are accused of breaking the Banks and Other Financial Institutions Act of 2020, and the government is asking the Federal High Court in Abuja to punish them for this.
Recall that TheRadar reported on September 11 that the Nigerian government, through its anti-graft agency, the Economic and Financial Crimes Commission (EFCC), froze N548.6 million in bank accounts belonging to alleged Nigerian cryptocurrency users. The EFCC got an order to freeze the accounts from a Federal High Court in Abuja.
The alleged crypto users had wallets on Bybit, KuCoin and others. The motion with which the EFCC got the court order was dated September 3, 2024 and alleged that the crypto users played roles in naira fluctuations and the devaluation of the country’s currency.
The Nigerian government had accused crypto exchanges of aiding the devaluation of the country’s currency by allowing users to arbitrarily fix the USDT-NGN exchange rates using peer-to-peer platforms. While it had cracked down on Binance—and the exchange had to delist all naira pairs on its platform and shut its peer-to-peer service—by arresting its executives and charging them, it had not really shined its light on both Bybit and KuCoin.
The freeze of funds and charges of the four individuals and firms are part of the Nigerian government’s clampdown on crypto traders in the country.
Ironically, the country’s Securities and Exchange Commission (SEC) has said it will create an enabling environment for young Nigerians who have become increasingly interested in crypto and tech to thrive. The commission recently granted operational licenses to two Indigenous crypto exchanges and promised that it would grant the same to other exchanges that meet its guidelines.
The crypto space in Nigeria is complicated. The government, with its recent moves, wants to regulate and tax the market while also clamping down on users it deems dangerous for the market and the country.
Experts argue that the lack of clarity on how the government wants the market to operate in the country is problematic and will inhibit its growth in the country.
US state blocks Nigerian’s crypto scam, fines him $50,000
Meanwhile, TheRadar earlier reported that The United States state of Kansas has blocked an attempt by a Nigerian cryptocurrency scammer, Bimbo Toyin Akinyemi, to defraud one of its residents of their cryptocurrency assets.
According to the state’s statement, “State of Kansas, U.S., Thwarts Attempt by Nigerian Crypto Scammer to Defraud Resident, Attracting Over $50,000 in Civil Penalties,” Akinyemi promised the unsuspecting victim a substantial return on cryptocurrency investment.
