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Crypto traders’ accounts closure or blocking by Nigerian banks questionable, says BICCON

The group pointed out that there are no existing laws criminalizing crypto in the country.

Central Bank of Nigeria / Image by: Wikimedia Commons

Wed, 24 Nov 2021, 07:08 am UTC

The Blockchain Industry Coordinating Committee of Nigeria (BICCON) has issued a public statement on what it calls the cryptocurrency clampdown in the country. According to the crypto and blockchain advocacy group, arbitrarily closing, freezing or blocking of the bank accounts of those engaged in crypto trading is questionable as it is not supported by current laws.

BICCON is a coalition composed of the Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), the of the country’s top cryptocurrency and blockchain advocacy groups. The coalition issued a statement on November 22 questioning the recent practice among Nigerian financial institutions of freezing or closing bank accounts of those suspected of trading in crypto.

“We consider questionable the actions of deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs) blocking, closing, and/or freezing the bank accounts of individuals and entities by the mere fact that these individuals and entities are involved in cryptocurrency trading or cryptocurrency-related transactions without more,” BICCON wrote. “It is not supported under the current laws of the Federal Republic of Nigeria.”

The group also urged affected parties to seek legal advice and redress in Nigerian courts. After all, Nigeria is ruled by law and “all agencies, bodies, institutions, and organizations, whether public or private, are expected to be subject to the rule of law,” BICCON added.

Financial institutions in the country have been recently closing and freezing the bank account of individuals or entities suspected of engaging in crypto trading since November 3, according to Bitcoin.com. These banks justified their actions as compliance with the Central Bank of Nigeria (CBN) directive issued on February 5.

However, BICCON said that the CBN overstepped its statutory bounds when it issued the circular. “We adopt and maintain our earlier position that however well-intentioned CBN’s current anti-crypto policy or action may be, it encroaches on the law-making powers of the National Assembly, contrary to the provisions of chapter 4 of the 1999 Constitution of the Federal Republic of Nigeria (as amended),” the group explained.

BICCON said that the CBN directed all DMBs, NBFIs, and OFIs to identify persons and entities that operate crypto exchanges or transacted in digital currencies and close their accounts even without an order from any court of competent jurisdiction. The group pointed out that there are no existing laws criminalizing crypto in the country.

“Though as the regulator, the CBN has the statutory authority to delimit banking operations, but ordering banks and other financial institutions to freeze [or close] accounts suspected to be in use for cryptocurrency may not be supported by law,” BICCON added. “This is because there is currently no legislation by the National Assembly criminalizing or illegalizing trade in cryptocurrency in Nigeria. Therefore, it is questionable whether the CBN has the statutory power to order the (permanent) freezing [or closure] of these accounts.”

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