Key Insights
- Nigerian government files criminal charges against four crypto dealers and several firms for operating without proper licenses.
- Defendants accused of unauthorized USDT-Naira transactions and violating foreign exchange laws.
ABUJA (MarketsXplora) – The Federal Government of Nigeria has initiated criminal proceedings against four Nigerian cryptocurrency dealers and several associated firms, accusing them of conducting financial institution operations without proper licensing, including facilitating USDT to Naira transactions.
The charges, filed between June and July 2024 in the Federal High Court in Abuja, name Ejiogu A. Chinedu, Nnamdi F. Okereke, Oty Ugochukwu Stanley, and Chukwuebuka F. Ogumba as defendants, along with companies such as Egomsinachi Road Autos, Plip Global Ventures, and Paparaxy Global Ventures.
According to court documents exclusively obtained by Nairametrics, the government alleges that the accused violated the Banks and Other Financial Institutions Act of 2020 by operating specialized financial services without valid licenses between 2021 and January 2024.
The prosecution further claims that the defendants, unauthorized to deal in Nigeria’s Autonomous Foreign Exchange Market, negotiated United States Dollar Tether (USDT) against the Naira with the public. This action, they argue, contravenes Section 29(1)(c) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, which criminalizes any foreign exchange dealings not permitted by law.
Nigerian authorities escalate crypto crackdown
This legal action follows a broader crackdown on cryptocurrency activities in Nigeria. On September 4, 2024, the Economic and Financial Crimes Commission (EFCC) secured a court order to freeze 548.6 million naira ($548,600) in bank accounts linked to suspected crypto users on platforms including ByBit and KuCoin, citing their alleged role in naira fluctuations.
EFCC counsel Ekele Iheanacho had urged the court to freeze these accounts, some belonging to individuals under investigation or prosecution for unauthorized foreign exchange dealings, money laundering, and terrorism financing.
The case stems from intelligence provided by the National Security Adviser, alleging various financial crimes on certain cryptocurrency exchange platforms. The EFCC’s ongoing investigation has reportedly uncovered bank accounts connected to individuals using virtual cryptocurrency exchanges to manipulate the naira’s value illegally and launder illicit proceeds.
This development is part of a series of legal actions taken by Nigerian authorities against cryptocurrency operations. In April 2024, the court granted an interim order freezing over 1,000 accounts for 90 days following an EFCC motion. While some freezing orders were subsequently lifted upon application by affected parties, the EFCC filed fresh motions to continue its investigation and freeze certain accounts, having initiated criminal charges against some account operators.
The legal teams for both the prosecution and defendants are expected to present their arguments in court, setting the stage for a landmark judgment that could significantly impact the cryptocurrency landscape in Nigeria.
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