The Central Bank of Nigeria (CBN) has intensified its clampdown on cryptocurrency users. In the last few days, it specifically targeted young Nigerians aged between 18 to 30 years, with a directive to legacy banks to flag and shut down individual and corporate accounts linked to bitcoin and other crypto-assets.
Users of Binance, Paxful, Patricia, and other peer-to-peer platforms have all been affected, according to a thread on Twitter by Nigerian journalist and analyst David Hundeyin. Accusing banks of colluding with the central bank, Hundeyin called the CBN’s actions “financial terrorism with state backing.”
Bankers targeting crypto accounts
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 is keen to see the e-naira succeed.
Hundeyin cites an internal advisory note by FCMB bank threatening its employees with punishment should they “willfully not disclose an account used for cryptocurrency transactions.” The advisory is couched in familiar bombastic terms as an act against “organized gangs, money launderers and terrorist financiers.”
Several other banks including Standard Chartered, Kuda, and GTB have proceeded to restrict or close both individual and corporate accounts run by young Nigerians.
Communications expert and crypto enthusiast Adewale Adetona complained about being interrogated by Standard Chartered, for example, over “the huge inflows and outflows in my account. I hate it here.” One Eze Apiriko had their account closed by the same bank over crypto use allegations.
There is a long list of red flags that bank employees are expected to target, as per the FCMB advisory. It includes accounts with high daily inflows from multiple payees, youth savings accounts, accounts operated by fintech or computer-based companies, corporate accounts run by people between the ages of 18 to 30 years, unlicensed bureau de change, and others.
“Without any kind of legal process or court order, some guy in a suit in Abuja is unbanking Nigerians by fiat order,” alleged Hundeyin.
Millennials resisting the system
The CBN is essentially running a dragnet on the entire banking population. Critics say some of the supposed red flags or descriptions “could mean a lot of accounts that have nothing to do with crypto may be closed.”
Senator Ihenyen, a lawyer who also heads the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), questioned the legality of the central bank’s actions. He declared:
This is unduly discriminatory and unconstitutional. This is not regulation but oppression. We are not in a lawless country. Only the National Assembly can illegalize cryptocurrency.
Young Nigerians have been hit hard by the CBN’s clampdown. They now intend to resist the system by boycotting commercial lenders that they accuse of colluding with the central bank to stifle cryptocurrency growth.
“Shall we begin a ‘bank run’ on the banks? Let’s withdraw all our money from the banks. We have to start punishing bad behavior in corporate Nigeria. Anyone that has the means to attack their market valuations (stocks and bonds) can also join this initiative,” thundered one Odubela Dami.
Temita Yoyode commented: “Government is clamping down again. Meffy (CBN governor) is not doing this in the interest of the economy. He’s doing this because they see young Nigerians are gradually not relying on the system for wealth creation. It threatens their position.”
Another said: “One way the youth can fight the wicked old generation in government is to starve it of revenue…all youth across the country should start moving their investment and funds to offshore accounts…we must deprive this government of our hard-earned money.”
Nigeria is the biggest cryptocurrency market in Africa. Chainalysis estimates that African countries collectively received around $105.6 billion worth of cryptocurrency between July 2020 and June 2021. Nigeria accounted for the lion’s share of this amount.