Recent reports have triggered a debate regarding the Central Bank of Nigeria (CBN), which issued an instruction for banks to freeze accounts involved in cryptocurrency transactions. Despite the allegations, the CBN has strongly refuted these claims, leading to uncertainty and raising questions about Nigeria’s position on digital assets.

Disputed Allegations!!!

The Central Bank of Nigeria (CBN) became embroiled in a contentious discussion following reports alleging a directive to freeze bank accounts linked to cryptocurrency exchanges such as Bybit, KuCoin, OKX, and Binance.

The alleged directive required banks and financial institutions to identify individuals or entities participating in crypto transactions and place their accounts under a “Post No Debit” (PND) instruction for a duration of six months.

A “Post No Debit” instruction limits specific transactions on a customer’s account, effectively barring them from making withdrawals or payments. If accurate, this directive would signify a notable escalation in the CBN’s approach towards crypto-related endeavors.

Uncertainty and Inconsistencies

The situation grew more complex when the CBN initially disclaimed issuing any such directive but later admitted that the allegations were unfounded. Despite the denial, uncertainties persist regarding the regulatory landscape for cryptocurrencies in Nigeria, particularly concerning the CBN’s supervision and enforcement protocols.

The decision to lift the ban in 2023 represented a substantial shift in Nigeria’s perspective on cryptocurrencies, acknowledging the worldwide demand and acceptance of digital assets. Nonetheless, apprehensions regarding the devaluation of the naira and inflation rates prompted a renewed evaluation of platforms providing crypto services.

Examination of Binance

Simultaneously, the recent crackdown by the Nigerian government on platforms offering cryptocurrency services highlights the challenges of regulating this evolving industry.

One such platform under scrutiny is Binance, a prominent cryptocurrency exchange, which encountered regulatory hurdles in Nigeria. The CBN expressed concerns about dubious financial transactions on Binance Nigeria, alleging that $26 billion in unidentifiable funds flowed through the platform in 2023.

Binance’s executive, Tigran Gambaryan, is facing accusations related to money laundering, while another executive, Nadeem Anjarwalla, is being pursued for extradition.