Cryptocurrency groups in Nigeria are preparing to take on the country’s central bank, as both sides dig in over a controversial regulatory decision to limit crypto use and trade in the populous West African nation.
The decision, or policy, by the Central Bank of Nigeria (CBN) forces legacy commercial lenders to flag and shut down both individual and corporate accounts linked to bitcoin and other digital assets arbitrarily.
CBN tightened that decision earlier this month to specifically target young Nigerians between the ages of 18 to 30 years old – a demographic that’s predominantly active in crypto. Critics have called the actions of the central bank “financial terrorism with state-backing”.
‘Crypto clampdown not supported by law’
The Blockchain Industry Coordinating Committee of Nigeria (Biccon), an umbrella body representing the three major crypto organizations in the country, put the central bank on notice on Nov. 22, saying its decision was not supported by any current laws in Nigeria.
In a statement shared with BeInCrypto, Biccon general secretary, Senator Ihenyen, called on all those affected by the central bank’s decision to sue both the CBN and the legacy bankers supporting it.
He took a swipe at traditional financial institutions, berating their “questionable actions” in closing crypto-related accounts without due process. Several crypto enthusiasts have since lost access to their bank accounts, either because they have been closed or frozen.
“Affected individuals and entities are advised to seek legal advice for the purpose of evaluating the individual circumstances of their cases,” said Ihenyen, in the statement.
“Where it is advised that their right has been infringed upon without legal justification, legal redress should be sought in our courts accordingly,” he added.
The Nigerian central bank banned cryptocurrencies in February, stopping local lenders from working with digital asset firms.
On Oct 25, it then launched its central bank digital currency (CBDC), e-naira, which it hopes will boost Nigeria’s Gross Domestic Product by up to $29 billion over the next decade. The apex bank, which maintains a chokehold on monetary policy, is keen to see the e-naira succeed.
Ihenyen accused the CBN of “overstepping its statutory bounds” and of “encroaching 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).”
Without a law “criminalizing or illegalizing” cryptocurrency trade in Nigeria, Ihenyen reiterated that the actions of the central bank in ordering the closure of bank accounts simply because someone was involved in bitcoin amounted to abuse of power.
He also pointed out that crypto users were not necessarily in violation of national anti-money laundering and anti-terrorism laws. Even if they were suspected of such activities, he says, Nigeria’s laws only “contemplate the freezing of individual or specific accounts, not a blanket closure of the accounts of a set of persons, entities, or an entire industry…”
Biccon previously warned that failure to scrap or review the CBN’s anti-crypto policy as issued in February this year could “set a dangerous precedent”. In its latest statement, the body expressed disappointment at the central bank’s lack of engagement, despite efforts by the local crypto industry to do so.
“We reject the undue discrimination against Nigeria’s blockchain and crypto industry,” Biccon stated.
Biccon is made up of the Blockchain Nigeria User Group (Bnug), Cryptography Development Initiative of Nigeria (Cdin), Stakeholders in Blockchain Technology Association of Nigeria (Siban), the three biggest crypto organizations in Nigeria. The country is Africa’s biggest crypto market.
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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.