Nigeria Central Bank Orders to Close Crypto Holders Bank Accounts

Vandana  |  Feb 6, 2021

For the past few months, it has been seen that Nigeria has emerged as a Bitcoin nation and it is having a very active peer-to-peer cryptocurrency trading market. However, the recent action by Nigeria Central Bank shows a completely different story. It has issued an open letter for all the banks across the country to immediately close the accounts of anyone dealing in cryptocurrency. According to the letter:

“The Bank hereby wishes to remind regulated institutions that dealing with cryptocurrencies [sic] or facilitating payments for cryptocurrency exchanges is prohibited.”

Binance Suspends Deposits After Orders From Nigeria Central Bank

After the Nigeria central bank has issued this order, Binance, the largest crypto exchange, has suspended deposits in Nigerian naira. Binance has suspended these services until there is any further notice from the bank in this matter. 

This order is just from banks and the users of peer-to-peer Bitcoin marketplaces can easily buy and sell crypto through other means. However, if this ban will remain in action then there might be a decrease in trading activities. When it comes to the legal crypto status in the country, it seems quite complex as the country is not having any kind of prohibition on cryptocurrencies. Meanwhile, Nigeria’s SEC has mentioned that it will be treating all the cryptocurrencies as securities until they are proven as assets. Now trading any unregistered asset will be considered illegal in the country.

Preventing Potential Securities Fraud

This move by Nigeria's central bank seems to be based upon the above guidelines by Nigeria’s SEC. It is assumed that the bank might be trying to prevent potential securities fraud. In the past few months, it has been seen that Bitcoin trading in Nigeria is increasing rapidly as in the last week only, the total Bitcoin trading volume in the country was $6.5 million. Now this move by the central bank might affect Bitcoin trading as it will prevent crypto traders from making bank transactions.

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