Central Bank Of Nigeria Orders Banks To Close Crypto User Accounts

In today’s cryptocurrency news, we can see that the Central Bank of Nigeria (CBN) has ordered all banks to close the accounts of users transacting with cryptocurrencies. According to the CBN, the country wants to remind regulated banking institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”

Following this news, all banks should “identify persons and/or entities” transacting with cryptocurrency or operating crypto exchanges on their platforms and “ensure that such accounts are closed immediately.”

Breaches of this order would face “severe regulatory sanctions” as per the  circular sent to financial institutions today and published on the central bank’s website. The order of the Central Bank of Nigeria came with a letter signed by Bello Hassan, who is the Director of Banking Supervision.

In September last year, the country’s Securities and Exchange Commission said that it would regulate trade in cryptocurrencies to provide protection for investors and ensure that transactions are transparent.

However, the Central Bank of Nigeria has a tough stance now, coming after protests in October against the excesses of the police’s Special Anti-Robbery Squad (SARS). This body saw organizers accepting Bitcoins for funding after the government blocked local payment platforms for collecting any donations.

“There’s a direct line that can be drawn from the EndSARS protests — which carried on partly with funding from cryptocurrency even though CBN restricted several accounts — to these latest regulations,” said Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos. “This latest instruction will end up making the case for cryptocurrency adoption better than any other argument. One promises freedom, while the status quo only reinforces restrictions.”

Nigeria has long warned against cryptocurrency investments. The country’s regulatories seem to not see the benefits of crypto and are more focused towards other assets. Dealers in cryptocurrency in Nigeria such as NairaEx (a Bitcoin trading platform) have been punished before, where the Nigerian authorities claimed that they were “not licensed or regulated by the CBN.”

All of this goes directly opposite of the trends, which indicate that “Bitcoin” is a real buzzword in the country. As a reminder, Nigeria was on the top of the list of countries that used the “bitcoin” search term according to Google Trends.