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  • Federal Government Implements Taxation on Cryptocurrency, Lifts Ban

    Federal Government Implements Taxation on Cryptocurrency, Lifts Ban

    In a surprising turn of events, the Nigerian government has lifted the ban on cryptocurrency and introduced a new approach by implementing taxation on digital assets. This decision marks a significant shift in the country’s stance on cryptocurrencies, which had been met with controversy and criticism.

    The ban on cryptocurrency was initially imposed in February 2021 by the Central Bank of Nigeria (CBN). The CBN instructed financial institutions to close accounts associated with cryptocurrency transactions, citing concerns over money laundering, terrorism financing, cybercrime, and the volatile nature of cryptocurrencies.

    However, after facing public backlash and recognizing the potential economic benefits of digital assets, the government has now opted for a taxation approach. This move aligns Nigeria with other countries, including the United Kingdom, the United States, Australia, India, Kenya, and South Africa, that have implemented taxation on cryptocurrencies.

    The timeline of events leading up to this decision sheds light on the evolution of Nigeria’s position on cryptocurrencies. From discussions between the CBN, Securities and Exchange Commission (SEC), and the Senate to the launch of the eNaira, Nigeria’s central bank digital currency, various developments influenced the government’s perspective.

    On December 2, 2022, Zainab Ahmed, the Minister of Finance, Budget, and National Planning, revealed plans to tax cryptocurrencies and digital assets in the finance bill. Finally, on May 28, 2023, President Muhammadu Buhari signed the 2023 finance bill into law, officially implementing a 10 percent tax on gains from the disposal of digital assets, including cryptocurrencies, effective from May 1, 2023.

    This decision signifies a shift towards embracing the potential economic opportunities presented by cryptocurrencies while ensuring appropriate regulation and revenue generation. It remains to be seen how this taxation framework will impact the cryptocurrency landscape in Nigeria and how it will be received by the cryptocurrency community and investors.

  • Over 33.4 million Nigerians Trade Crypto Despite CBN’s Ban – Report

    Over 33.4 million Nigerians Trade Crypto Despite CBN’s Ban – Report

    Despite the Central Bank of Nigeria’s restriction on cryptocurrencies-related transactions in the banking sector, a report by a crypto platform has said about 33.4 million Nigerians trade or own crypto assets.

    In its report, ‘Into The Cryptoverse: Decoding The World Of Crypto Consumers,’ KuCoin, a crypto exchange with over 10 million registered users, said the crypto population is largely dominated by 18 to 60-year-olds.

    It said, “According to Google Trends, Nigeria was recorded as the country with the highest number of bitcoin searches globally in early 2021, signaling the growing utility of cryptocurrency in the country.

    “The data also pointed out that the country’s youth have been the decisive force behind the surge in bitcoin searches. According to our survey conducted in early 2022, 33.4 million Nigerians, which accounts for 35 per cent of the population aged 18 to 60, currently own or have traded cryptocurrencies over the past six months.

    “70 per cent of these crypto investors claim that they will likely increase their cryptocurrency assets soon. Another six per cent of the country’s population are interested in investing in cryptocurrency in the coming 6 months, suggesting that the cryptocurrency adoption rate might continue to increase.”

    According to the crypto exchange, the depreciation of the naira over the last six years has fuelled the increase in the number of crypto users in the nation.

    It added, “The Nigerian currency, Naira, has depreciated by more than 209 per cent in the past six years. Some Nigerians recognised the financial opportunity brought by Bitcoin early on.

    “According to our survey, 37 per cent of crypto investors in the country began trading cryptocurrencies more than three years ago. At the same time, 6 per cent started trading cryptocurrencies more than six years ago.

    “Meanwhile, as prices continue to rise, with food inflation reaching its highest point since 2008, the challenging economic climate in Nigeria remains and has even worsened by COVID-19, making cryptocurrencies attractive alternative sources of income, particularly in the bullish market in 2021. According to the survey, 26 per cent of crypto investors have begun trading cryptocurrencies in the last 6 months.”

    The firm said the average number of monthly transactions across African countries showed a 1,386.7 per cent from January 2021 to January 2022.

    It added the number of users also increased by 2,467.2 per cent within the same time period.

    According to a report by Chainalysis, a blockchain data platform, the cryptocurrency market in Nigeria and other African countries grew by 1200 per cent in 2021.

    The firm added that Nigeria is the sixth leading country in the world in terms of cryptocurrency adoption as a result of its peer-to-peer monetary systems.

    The report said the African region, dominated by Kenya, Nigeria, South Africa, and Tanzania, has one of the highest grassroots adoptions of crypto in the world. It added that Africa has the third-fastest growing cryptocurrency economy in the world.

    The International Monetary Fund recently said the adoption of crypto assets was being driven by emerging markets and developing economies. It added that countries in this region increased their trading volumes in crypto exchanges in 2021.

    In February of 2021, the CBN put a restriction on cryptocurrency transactions in the nation. It had said, “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing with cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”

    Recently, the CBN fined three Deposit Money Banks N800m fine for violating its regulations barring customers from transacting in cryptocurrencies.

  • CBN Omission, DMB’s Errant on Cryptocurrency

    CBN Omission, DMB’s Errant on Cryptocurrency

    By Adefolarin A. Olamilekan

    Humanity will continue to live in appreciation of Information Communication Technology (ICI) as Fourth Revolution. That demarcate us from from, Slavery, Agricultural and Industrial Revolutions respectively. Reason been that, it is one of the great wonders that happened to Mankind. Bringing so much demostrated changes with value additions to life.
    Fundamentally, ICT has gone beyond just information and telecommunication to varieties of innovation in various aspects has demand by human needs.
    Chiefly, significant breakthrough in telemedicine, creative engineering, drone aviation and virtual education are attributed to ICT. Not to forget, It role in aiding economy growth, social interraction, networking and relations.
    Take for instance, the system for exchange of goods and services has been transformed remakably, courtesy of ICT.
    The same is with the financial, capital and commodity market environment.
    However, in the realm of economic dealings which ICT birthed what we now call digital currency economy. It immensely, usher us into a novel opportunity in digital currency and financial platform off which Cryptocurrency and it allied digital currency came onboard.
    Not to mentioned the varieties of digital coins and fintech services to deals on and make profits.
    Unfortunately, the introduction and acceptance of this form of exchange has challenge the traditional mode of physical cash currency transaction and monetary dealings today.
    Coincidentally, leading global financial monetary authorites such as International Monetary Fund (IMF),World Bank, and Central Banks across the world. Acknowledge ICT innovations in the financial sector, advancing it services and cashless model.
    Conversely, they are not comfortable with some of the changes to eliminate the power of monetary authorities.
    Arguably, this come against the decentralization nature of cryptocurrency system. It is founded on the platform of blockchain technology innovation. What monetarist economic consider to be in contrast to it role. And essence of genuine trading system that required human interface, integrity and authority control.
    Interestingly, cryptocurrency in recent times as recorded deals runing into billions of dollars transactions.
    Thereby, empowering individuals and groups with funds and transfer of such billions of dollars across national borders without knowldge of or control of monetary bodies.
    Hence, the fear of crypto destabilizing establised status quo,causing financial crisis and wreaking havoc through crypto speculation for hot money profits.
    This however reawaken monetary authorities in different country to rise against crypto taken over physical finacial capital space and enroding principles.
    Critically, the soverighn authority in charge of monetary policy in Nigeria, have been up against cryptocurrency transaction in the country. The recent media report of CBN hammer of fines on three Deposit Money Bank(DMB’s) attracts a lots of reactionary views.
    Moreso, that the apex bank action raised questions on the continous ban of cryptocurrency in the country.
    Particularly, as the fine of N800 million against errant DMB’s facilitating cryptocurrency transactions calls to question the effectiveness of the ban.
    Instructively, we cannot forget how cryptocurrency community and stakeholders in unisome challeng the apex bank banned policy.
    Many of them questioned the rational behind it with furious accussation against the authority. Denying young Nigerians of an important source of employment and income to sustained themselves in the face of harsh economic reality.
    Nevertheless, the apex bank assert it reasons, basing it primarily on the illegality of crypto to serve as illicit financial medium to funds terrorism,drugs cartel and as well as forex speculations.While many Nigerians also believe the apex bank action deserved commendation,if the truama from MMM shock is considered.
    In retrospect the CBN’s in an efforts to tighten down on cryptocurrency, ensuring that DMB’s restrictions on cryptocurrency trading are in place.
    As at 5th Febuary 2021 in a circular informed Deposit Money Banks, Non-Financial Institutions, and other financial institutions against engaging in Crypto and other digital transactions.
    Majorly, the CBN was specific in this fiat directive to local financial institutions against having any transactions in crypto or facilitating payments for cryptocurrency exchanges.
    In addition, the apex bank instructed the financial institutions to immediately “close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges”.
    As a means to deterred DMB’s and other finanacial institutions from been sleazy. In furtherance, the apex bank place on notice that any breaches to the directive “will attract severe regulatory sanctions andcompliance is was immediate effect.”
    However, the media report that three DMB’s failure to comply with the regulations of prohibiting some of their crypto enthuist customers from transacting in cryptocurrencies attract CBN hammers.
    According to the report, Access Bank Plc, was fined N500 million,
    United Bank for Africa Plc N100 million naira,and Stanbic IBTC Bank, the local unit of Standard Bank Group Ltd., N200 million for two accounts allegedly used for crypto transactions.
    In a switch reactions to this development,one of the DMB’s Chief Executive Officer claimed that, “the transactions for which it was sanctioned may have passed through its system undetected”.
    He however admit that the CBN was able to detect the relevant transactions “using advanced capacity” that Nigerian lenders do not have access to, and they have urged the central bank to share the technology”.
    In this regard, it has been acknowledge that the CBN has the ability to detect cryptocurrency transactions that DMB’s systems may lack capacity to detect.
    Succintly, it could also be the failure, neglegence as well as intended actions on the part of DMB”s to make profit from such illegal activities.We can’t rule out such adventures by cowboys and hyenas in the financial sector of Nigeria.
    On the other hand in all sense of urgency, having acknowledge the efficacy of ICT as the backbone to all innovation in the financial sector.We must also not lose focus on the inherent problems associated with it, espcially with the intro of cryptocurrency.
    Although, the CBN in particular have been up scaling it game in monetary policies,even going as far as creating e-naira digital platform.
    Nonetheless,it omission stand erect as not engaging stakeholders in policy formulation before eventual implementations.
    Going forward,what need to be done.First, a legislative drafting with input from all stakeholders should be consider by the CBN to stop all forms of illegal financial scam platform.
    Secondly, CBN need to creat platform for DMB’ and other financian institutions to be more savvy in Fintect Intelligent in detecting illegal transaction in crypto and others. With the revelations that cryptocurrency players engage more through peer-to-peer transactions to bypass Nigerian banking system restrictions.
    Lastly, there is a huge gap in media advocacy and sensitization on the illegality of crypto and others. The CBN shoukd partner with the media and CSOs in this regards.
    For us we hold it high, that for the CBN not to be caught in the narrations that accompany failure.We call for due diligence,from the apex bank to stay put on its mandate to mitigate all forms digital financial and banking scam not just cryptocurrency transactions.

  • UK Bans Cryptocurrency Exchange Binance

    UK Bans Cryptocurrency Exchange Binance

    The UK’s finance watchdog has banned major cryptocurrency exchange Binance from regulated trading in Britain, as the industry faces greater global scrutiny.

    Binance Markets Limited, part of Binance Group, is “not permitted to undertake any regulated activity in the UK”, the Financial Conduct Authority (FCA) said in a statement published over the weekend.

    The ban affects options and futures contracts related to bets on price movements of cryptocurrencies.

    However purchases of cryptocurrency units, such as of bitcoin and dogecoin, can continue since they are not regarded as financial products and are therefore not regulated.

    Binance Group tweeted that the FCA move would have “no direct impact”.

    Founded in China four years ago, Binance is one of the world’s two biggest crypto exchanges along with Coinbase in the United States.

    Cryptocurrencies have long sparked concern among central banks and regulators alike, because of their lack of oversight.

    The FCA has meanwhile warned consumers once more not to be lured by promises of high returns.

    Bitcoin traders shrugged off the weekend developments, sending the virtual unit up 5.47 percent to $33,981 in Monday deals.

    The unit has however slumped in recent weeks after China launched a crackdown on the industry.

    Bitcoin had hit a record near $65,000 in April on the back of runaway demand.

    Laith Khalaf, financial analyst at stockbroker AJ Bell, said that tighter regulation was a consequence of this boom.

    “Cryptocurrency is a victim of its own success because regulators across the globe are increasingly turning their beady eyes on crypto assets — and companies like Binance that offer crypto services to consumers.

    “This isn’t a step change in regulation which is going to knock the crypto craze on the head, but it is part of a growing trend of regulatory intervention in crypto markets.”

    AFP

  • VP Osinbajo speaks against ban on Cryptocurrency

    VP Osinbajo speaks against ban on Cryptocurrency

    Vice President Yemi Osinbajo has called for the regulation of cryptocurrencies in the country instead of the ban placed on it by the Central Bank of Nigeria CBN.

    Osinbajo made the call when he spoke at the Bankers Committee Vanguard in Lagos State today February 26.

    ”First is that there is no question that blockchain technology generally and cryptocurrencies in particular will in the coming years challenge traditional banking, including reserve banking, in ways that we cannot yet imagine so we need to be prepared for that seismic shift.

    Clearly the future of money and finance, especially for traditional banking, must be as exciting as it is frightening. But as we have seen in many other sectors disruption makes room for efficiency and progress.

    Secondly, I fully appreciate the strong position of the CBN, SEC and some of the anti corruption agencies on the possible abuses of crypto currencies and their other well articulated concerns, but I believe that their position should be the subject of further reflection.

    There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.”he said

     

    The CBN on February 5 announced the ban on cryptocurrencies. The apex bank alleged that the digital currency was being used to fund criminal activities like kidnapping, terrorism, and others.

  • Outrage as CBN Gov Emefiele says Cryptocurrency was created out of ‘thin air’

    Outrage as CBN Gov Emefiele says Cryptocurrency was created out of ‘thin air’

    The Central Bank of Nigeria (CBN) Governor Godwin Emefiele’s description of Cryptocurrency as money created out of ‘thin air’, has elicited a flurry of reactions especially on social media.

    Emefiele, while briefing a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Market, stated that cryptocurrency is used to describe the “activities of players in an electronic dark world”

    In the now-viral video sighted by The Nation, Emefiele said: “Cryptocurrency is an electronic or digital currency that is issued by largely unknown, unregulated elements using computer codes that are basically meant to encrypt or hide information about the transactions and the operators…

    “And in the sense, it is money that is created out of thin air…

    “…cryptocurrency is used to describe the activities of players in an electronic dark world, where transactions are extremely opaque, they are black; they are not white, they are not visible and they are not transparent.

    “In another parlance, these are people who deal in transactions that not only do not want a trail but indeed by its nature cannot be trailed. I’m sure that these definitions are scary enough to create anxiety for any regulator or central bank in any part of the world.”

    The Nation had reported the CBN on February 5 ordered all banks to close accounts of anyone who transact in cryptocurrency

    The order was contained in a circular to banks and other financial institutions.

    According to the CBN, dealing in cryptocurrency or facilitating payments for cryptocurrency exchanges is prohibited.

    Nigerians, especially youths, who were displeased with the CBN Governor’s description of cryptocurrency took to social media to berate him.

    Terkuma Iorjaah said: “So Emefiele the CBN Governor thinks Cryptocurrency is created from thin air by people of the dark world? Is this man dragging the GOAT position with Bubu in cluelessness?

    Enachioke Crown said: “CBN Governor went all voodoo about crypto currency because he knows Nigerians can be religious extremists, so he wants to push a 666 narrative to get some people on his side. Our government can be childishly manipulative, its embarrassing to se

    Azeez Olajide said: “Emefiele, a whole CBN Governor thinks Cryptocurrency is created from thin air by people of the dark world. And the idea of it being decentralized doesn’t make it ideal to use. Until we start putting those with FUTURE visions on sit, this country will keep retrogressing

    Ọlámidé Ọmọreghà said: “The CBN governor doesn’t even understand what cryptocurrency is, that’s why he is reading the definition from a book.

    @Honipsdigitals said: “CBN Governor (Godwin Emefiele) is obviously a liar & manipulator trying to use his “dark world/666 currency/Religion” speech to deceive himself.

    “He’s expanding the scope of the ban to target people using BTC or other cryptos since they’re no longer benefiting in the Capital market.”

    @billotwip said: “Someone should educate the CBN governor, Cryptocurrency is more transparent than CBN itself and other banks.

    “They printed 10trillion naira to fund the failing economy yet he said crypto is out from thin air. His script reading was a total embarrassment.”

    Obasooto Segun said: “Everything that is working fine now was criticized at one point in time. The CBN governor’s criticism is based on his lack of understanding the dynamics of cryptocurrency. Rather than insult him we should just tell him to do his homework properly without rushing to conclusion.”

    @ObongRoviel said: “That CBN Governor is very unintelligent..From that his speech you can see why our economy is where it is right now..He couldn’t even use Google to carry out his research on Cryptocurrency he just read everything from Jehovah witness manual”

    @firstdoctorr said: “In 2021, USA & China are the world’s top economies. Americans own Coinbase. Chinese own Binance. Both cryptocurrencies.

    “But a CBN governor wants to ban cryptocurrency transactions in Nigeria because he thinks it’s money created out of “thin air”. Don’t kill your crypto startups pls!”

    Nedu Ekeke said: “That man in that video is our country’s CBN governor. That explains why he takes orders from a president who knows absolutely nothing, except nepotism, of course.”

  • Nigerian lawmakers oppose the CBN’s crypto ban

    Nigerian lawmakers oppose the CBN’s crypto ban

    The Securities and Exchange Commission (SEC) of Nigeria has put a hold on its cryptocurrency regulatory plans following the recent ban on financial institutions from providing cryptocurrency exchange services to central banks.

    Nigeria’s SEC puts crypto regulations plans on hold

    “For the purpose of participating in the’SEC Regulatory Incubation Framework’, the assessment of all persons (and products) subject to the Central Bank of Nigeria’s Directive dated February 5, 2021 states that such persons are Nigerian banks. It will be held until the system can handle bank accounts. “

    The committee approved digital assets in September 2008. The SEC then announced that it would build a “sandbox” of cryptocurrency regulation as part of its efforts to fully regulate the market.

    For the SEC, the statement is in response to stakeholder inquiries regarding the policy contradictions believed to lie between the September announcement and the central bank directive. According to the committee, the proposed sandbox of regulations on non-cryptocurrency fintech companies focusing on capital markets will continue as planned.Broker of the monthInvestousTest Investous Now

    The central bank’s reaction to the ban on cryptocurrencies has diverged national and geopolitical boundaries, and progressive factions seem to be more willing to oppose the move. The central bank has described the move as a measure to prevent the use of cryptocurrencies by criminal organizations in Nigeria.

    Nigerian lawmakers oppose the CBN’s crypto ban

    CBN’s actions have outraged the country’s legislature, as only Nigeria’s parliament or senate can pass laws.

    Nigerian Congressman Solomon O. Adeola believes that such a ban is too drastic a measure for crypto assets. Cryptocurrencies are regulated all over the world, so the CBN must develop clear rules to control this activity. The Senate emphasized the need to “sit down at the negotiating table” with regulators so that each agency can state its own position on cryptocurrencies in Nigeria. Many congressmen take the same position.

    Senator Sani Musa said Bitcoin has stripped Nigerian naira of value, rendering it useless. He noted that cryptocurrency transactions take place all over the world, and due to their confidential nature, it is difficult to determine the owner of digital assets. The newest technologies are so powerful that it is unclear how they should be regulated. However, this must be done. If Nigeria’s regulators are unable to control crypto assets in such a weak economy, then it is not clear what the country will be like in a few years, Musa said. Senator Biodun Olujimi also believes cryptocurrencies will help boost Nigeria’s economy.

    “We didn’t create cryptocurrency, so we cannot eliminate it. We cannot escape her influence. The cryptocurrency industry is developing with good results. Nigeria is unable to insure itself against it. You just need to make sure that crypto assets are not used to harm. The time has come to agree on all issues related to cryptocurrencies,” Oluzhimi said.

  • Senate summons CBN Governor, DG SEC over cryptocurrency ban

    Senate summons CBN Governor, DG SEC over cryptocurrency ban

    The Senate has mandated its Committees on Banking, Insurance and Other Financial Institutions, ICT and Cybercrimes and Capital Market to invite the Governor of the Central Bank of Nigeria, Godwin Emefiele to brief it on the recent ban on cryptocurrency in the country.

    The Senate also invited the Director General of the Securities and Exchange Commission (SEC), Lamido Yuguda, to meet with its joint committee on the issue.

    It explained that the information that would emanate from the briefings from the two regulatory bodies would assist the Senate to “determine the opportunities and threats of the cryptocurrency on the nation’s economy and security.”

    This resolution of the upper chamber was sequel to its consideration of a motion titled: “CBN’s decision to stop Financial Institutions from transacting in Crypto currencies and matters arising therefrom” at plenary.

    The motion was sponsored by Senator Istifanus Dung Gyang, (Plateau North) and Senator Adetokumbo Mukhail Abiru, (Lagos East).

    Senator Gyang who presented the motion urged his colleagues to note that the CBN has issued a directive stopping all financial institutions from transacting in cryptocurrencies.

    He said that the directive of the apex bank was a follow up to its earlier directives in January, 2017 and February 2018 which “forbade banks not to use, hold, trade and/or transact in cryptocurrencies.”

    He further informed the Senate that the decision of the CBN was said to have been predicated on the need to safeguard the Nigerian economy from the adverse effects of the cryptocurrency regime which are “unregulated digital or virtual currencies that are issued by anonymous entities and secured by cryptography.”

    He observed that cryptography is a “method of encrypting and hiding codes that prevent oversight, accountability and regulation upon which the CBN says its use in Nigeria violates and contravenes existing law as only the CBN is authorized by law to issue legal tender.

    He added: “Concerned that Crypto currency by nature is anchored on anonymity, obscurity and concealment of its patrons and actors making it difficult, if not impossible, to trace, track and uncover those that may deploy it for ignoble and illegal usage such as money laundering, terrorism financing, drug purchase, cybercrime, etc.

    “Aware that the action and directive of the CBN has attracted sharp reactions from Nigerians and has become a topical subject of national discuss; and

    “Realized that Crypto currency is both an opportunity and a threat, hence the Senate has a responsibility to ensure that the nation and citizens do not miss out on the opportunities that Crypto currency offers and in the same vein, mitigate and prevent likely consequential effects on the nation’s economy and security.”

    Senators in their contribution supported the motion.

    Senators approved the only prayer of the motion when it was put to voice vote by Senate President Ahmad Lawan.

    The joint committee was given two weeks to report back to plenary by the Senate President.

  • Digital Rights Lawyers sue CBN, SEC over Cryptocurrency Ban

    Digital Rights Lawyers sue CBN, SEC over Cryptocurrency Ban

    A civil society organisation, the Digital Rights Lawyers Initiative, has dragged the Central Bank of Nigeria and Securities and Exchange Commission to court over the recent action of the apex bank that Deposit Money Banks should desist from transacting in and with entities dealing in cryptocurrencies.

    In Suit No. FHC/L/CS/ 188/2021 filed on Monday, February 8, 2021 at the Federal High Court in Lagos, the group said the CBN, which is the first defendant, lacked the power to restrict financial institutions from dealing in cryptocurrency transactions.

    The digital rights lawyers argued that the second defendant, SEC, had in a circular dated September 14, 2020, declared cryptocurrencies as legal digital assets “protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)”.

    The lawyers, therefore, asked the court to validate the Investments and Securities Act 2007, which made SEC the apex regulatory body of the Nigerian capital market.

    They also prayed the court to declare the CBN action as “ultra vires, unconstitutional, null and void” while also seeking a “perpetual injunction restraining the 1st defendant from regulating and/or further regulating virtual currencies/ crypto currencies in Nigeria.”

    The suit, which has not yet been assigned to any judge, was filed on behalf of the group by its counsel, Irene Chukwukelu.

  • Digital rights lawyers sue CBN, SEC over cryptocurrency prohibition

    Digital rights lawyers sue CBN, SEC over cryptocurrency prohibition

    A civil society organisation, the Digital Rights Lawyers Initiative, has dragged the Central Bank of Nigeria and Securities and Exchange Commission to court over the recent action of the apex bank that Deposit Money Banks should desist from transacting in and with entities dealing in cryptocurrencies.

    In Suit No. FHC/L/CS/ 188/2021 filed on Monday, February 8, 2021 at the Federal High Court in Lagos, the group said the CBN, which is the first defendant, lacked the power to restrict financial institutions from dealing in cryptocurrency transactions.

    The digital rights lawyers argued that the second defendant, SEC, had in a circular dated September 14, 2020, declared cryptocurrencies as legal digital assets “protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)”.

    The lawyers, therefore, asked the court to validate the Investments and Securities Act 2007, which made SEC the apex regulatory body of the Nigerian capital market.

    They also prayed the court to declare the CBN action as “ultra vires, unconstitutional, null and void” while also seeking a “perpetual injunction restraining the 1st defendant from regulating and/or further regulating virtual currencies/ crypto currencies in Nigeria.”

    The suit, which has not yet been assigned to any judge, was filed on behalf of the group by its counsel, Irene Chukwukelu.

    The PUNCH had earlier reported that the apex bank said cryptocurrencies promote illegal activities and raise risks, among other reasons.

    Moghalu had said there was regulatory dysfunction between the CBN and SEC. He had also argued that there was no means of exchange devoid of risk, adding that if the CBN could manage the risks of paper currency and electronic payments and other means of exchange, it should also be able to mitigate the risks associated with digital platforms such as cryptocurrencies.