Key Insights
- Nigeria’s EFCC secures court order to freeze $548,600 in bank accounts linked to crypto users on platforms like ByBit and KuCoin.
- The action is part of a broader crackdown on alleged foreign exchange violations and accusations that crypto platforms contribute to naira devaluation.
ABUJA (MarketsXplora) – Nigeria’s Economic and Financial Crimes Commission (EFCC) has obtained a court order to freeze 548.6 million naira ($548,600) in bank accounts linked to suspected cryptocurrency users, as part of a broader crackdown on alleged foreign exchange violations and tax evasion by foreign crypto platforms.
The Federal High Court granted the order on September 4, 2024, based on a motion filed by the EFCC on September 3. The action targets users of platforms such as ByBit and KuCoin, accusing them of contributing to the devaluation of the Nigerian naira.
This move follows the February 2024 arrest of two Binance executives over allegations of money laundering and terrorism financing. The EFCC is currently pursuing a separate case against Binance and Tigran Gambaryan involving $35.4 million in alleged money laundering offenses.
EFCC investigator Okoro Philip stated in an affidavit that recent currency stabilization efforts, which had seen the dollar trading at 980 naira on the black market, were rapidly reversed on April 18, 2024, when the rate surged to 1,250 naira per dollar.
“These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms,” Philip alleged in the document, exclusively obtained by Nairametrics.
The EFCC identified 22 bank accounts belonging to individuals described as “willing sellers of USDT” who facilitate naira transfers equivalent to the stablecoin. The agency accuses these account holders of unauthorized foreign exchange dealings and operating at rates detrimental to Nigeria’s financial system.
Related! Nigeria Takes Legal Action Against Four Unlicensed USDT-Naira Traders
Crackdown on alleged foreign exchange violations
Furthermore, the EFCC alleges that ByBit, KuCoin, and other foreign cryptocurrency platforms are deliberately ignoring mandatory anti-money laundering regulations, enabling users to operate under a “cover of secrecy.”
“The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value,” an EFCC official stated in the case, marked FHC/ABJ/CS/543/2024.
The frozen accounts include those of Kora Payment Network, AD Ishola Farms Ltd, and Microcore Tech Investment Services. Justice Emeka Nwite granted the motion to freeze these accounts pending the conclusion of investigations and potential prosecution.
This action is part of a larger regulatory offensive against cryptocurrency activities in Nigeria. The country’s National Security Adviser recently classified crypto trading as a national security issue, leading to restrictions on several fintech companies.
In response to the government’s crackdown, major platforms like Binance and KuCoin have halted NGN/USD P2P trading. ByBit, however, remains one of the few exchanges still offering peer-to-peer services on its platform, making it a popular choice among Nigerian traders.
The Central Bank of Nigeria has ordered five prominent fintech companies – OPay, Palmpay, Moniepoint, Kuda, and Paga – to cease onboarding new customers and report any accounts involved in cryptocurrency trading to the National Security Adviser.
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