Standard Bank Group Ltd was fined ₦200 million (~$481,000) for 2 accounts alleged to have been used for crypto transactions. Access Bank was fined ₦500 million (~$1.2 million) for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd; and United Bank for Africa (UBA) was fined ₦100 million (~$240,000) for digital currency transactions by a customer.
Nigeria’s ongoing crypto restriction
In February 2021, the Central Bank of Nigeria ordered all commercial banks and financial institutions to close all customer accounts that operate in or trade cryptocurrency. The apex bank referred to a 2017 circular that ordered commercial banks “not to use, hold, trade and/or transact in cryptocurrencies “.
Like most countries like China that have restricted crypto trading, CBN cited financial safety as the reason for the ban. In its circular clarifying its position, Osita Nwanisobi AG Director, Corporate Communications of CBN stated that most crypto users value anonymity, obscurement and concealment. “It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion,” he said.
It’s important to note that the CBN didn’t ban cryptocurrencies in Nigeria as it’d have to outlaw crypto exchanges and shut down the internet to achieve that. It did, however, cut the link between crypto exchanges and their users. So Nigerians can still buy and trade crypto, just not through any Nigerian bank or fintech.
In response to the restriction Nigerian crypto exchange platforms have responded with new ways to circumvent the restriction including introducing peer-to-peer (P2P) exchanges for their cryptocurrency transactions, as well as trading stablecoins.