CBN Goes After Crypto Traders, Exchanges, Threatens to Sanction Banks

The Central Bank of Nigeria (CBN) has warned all Deposit Money Banks (DMBs) and other financial institutions against encouraging and facilitating cryptocurrency exchanges.

In the latest circular issued on Friday, February 5, 2021, the apex bank said on January 12, 2017 it cautioned DMBs, Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the public on the risk associated with transactions in cryptocurrency.

It, therefore, said further to the 2017 directive, the central bank wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

All DMBs, NBFIs and OFIs are now mandated to identify and report persons and entities dealing and operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

It added that breaches of the directive will attract several regulatory sanctions.

Cryptocurrency continues to gain relevance among Nigerians despite warnings on the risk associated with the unregulated crypto space.

Nigeria is one of the world’s leading cryptocurrency traders and in recent months, top global cryptocurrency exchanges like Binance, Luno, etc have opened a Nigerian office while those that could not fund a Nigerian office are spending millions to sustain their operations in the Nigerian cyberspace.

Binance and other top exchanges are expected to be affected by the new directive, especially after cryptocurrency traders have started receiving calls to desist from withdrawing or transacting with platforms like Binance or have their bank account closed immediately.

A Twitter user,  Nathaniel said he received a call from Guaranty Trust Bank (GTB) on Monday asking him not to withdraw from Binance to his GTB account again.

He said, “They called me on Monday, saying they noticed a withdrawal from Binance to my GTB account and that I shouldn’t do it again.”