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Following several moves at cautioning Nigerians against investing in cryptocurrency as virtual currencies are not legal tender, the Central Bank of Nigeria (CBN) has finally ordered all banks to close any account transacting with cryptocurrencies.
In the CBN letter dated Feb. 5 and signed by Director of Banking Supervision, Bello Hassan, the regulator ordered an immediate termination of all transactions relating to virtual currencies via channels of all licensed financial operators.
See below a summation of the CBN’s letter already in public space:
- The CBN said it was reminding regulated banking institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
- As such, 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.”
- Any breaches of the order would face “severe regulatory sanctions,” the order states.
Cryptocurrencies carry unregulated risks – not yet legal tender
The CBN has consistently maintained that investments in cryptocurrency carry unregulated risks as Nigeria like most of the rest of the world still deem virtual currencies as no legal tender.
In a press statement by the bank on Wednesday, February 28, 2018, it stressed that cryptocurrencies whether Bitcoin, Litecoin, Dogecoin, Onecoin, Ripples, Monero, or by whatever name they are transacted are not legal. Similarly, virtual currencies exchanges such as Ethereum, Luno, Paxful and NairaEx are unlicensed and outside the purview of the CBN’s regulation making them unlawful.
Dealers, investors in cryptocurrencies not protected by law
According to the statement signed by the bank’s Acting Director, Corporate Communications, Isaac Okorafor: “For the avoidance of doubt, dealers and investors in any kind of cryptocurrency in Nigeria are not protected by law. Virtual currencies are traded in exchange platforms that are unregulated, all over the world. consumers may therefore lose their money without any legal redress in the event these exchangers collapse or close business.
“Members of the public are hereby warned that virtual currencies are not legal tender in Nigeria. Accordingly, we wish to caution all and sundry on the risks inherent in such activities.”
