Regulation
Nigeria freezes over 1,100 crypto traders’ bank accounts amid wider regulatory crackdown – DL News
- Nigeria’s EFCC has frozen the bank accounts of over 1,100 crypto traders.
- The anti-corruption unit said traders were manipulating the naira.
- An investigation into this matter is underway.
Nigerian crypto traders, traders with large trading volumes on peer-to-peer platforms, I dreaded what would happen next as the country’s fiat currency, the naira, showed further weakness in the foreign exchange market last week.
These fears were unfounded.
Indeed, the Economic and Financial Crimes Commission, or EFCC, Nigeria’s anti-corruption agency, has frozen the bank accounts of 1,146 crypto traders, according to court documents seen by DL News Monday.
Crypto traders are accused of foreign exchange racketeering, currency manipulation, money laundering and terrorist financing.
“We have been informed of your involvement in cryptocurrency trading,” informed one of his clients at a Nigerian bank via an email seen by DL News.
The person concerned confirmed to DL News that he is a crypto trader but wishes to remain anonymous.
“We hereby request that you provide us with a valid order from a court of competent jurisdiction to effect the release of your funds,” the bank’s notice reads.
The EFCC can, however, block customers’ attempts to recover their funds even if a court order allows them to do so.
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Indeed, the order obtained by the EFCC states that the accounts should be frozen until it completes its investigation. He has 90 days to reach a conclusion.
Since the beginning of this year, the EFCC has been part of an inter-agency task force investigating allegations of manipulation of the value of the naira by crypto traders.
That the investigation started with Binancewhat was designated as responsible for the worst ever decline in the naira earlier this year. The commission has since accused the crypto exchange and two of its executives of money laundering.
Now, the EFCC appears to be turning its attention to other crypto exchanges as it escalates its war with peer-to-peer traders.
Commission chairman Ola Olukoyede said last week that investigators had uncovered currency manipulation on other crypto exchanges that was “worse than Binance.”
Nigerian crypto traders are no strangers to having their bank accounts frozen.
Such actions previously occurred under a crypto ban regime that prohibited commercial banks from servicing exchanges and traders between February 2020 and December 2023.
In December, Nigeria’s central bank rescinded the order and allowed commercial lenders to service crypto exchanges and traders.
The central bank also said last week that it was not considering reinstating the crypto ban. A circular purportedly from the central bank ordered banks to freeze the accounts of cryptocurrency traders. But this circular was false.
Osato Avan-Nomayo is our DeFi correspondent based in Nigeria. He covers DeFi and technology. To share tips or story information, please contact him at osato@dlnews.com.