The Central Bank of Nigeria (CBN) has dismissed the press report claiming they have issued an ultimatum to all banks to blacklist anyone found violating their order. The alleged order includes identifying individuals and organisations dealing with cryptocurrency exchanges and issuing six-months Post-no-debit Instructions.
Reversal of previous restrictions on crypto transactions
A bank or financial entity sends a “Post No Debit” for the customer’s account, a command that prevents certain transactions. Under the restrictive order, the account holder will be prevented from accessing their funds to withdraw or debit.
Distrust or doubt popped up when the central bank refused to acknowledge the story, and later, the denial was removed. Some hours after such accusations were made, they announced that the claims were untrue.The bank said it would catch anyone it thinks is trading and selling Tether publicly and referentially on the listed platforms illegally, especially using the peer-to-peer method.
The report also indicated that all regulated financial institutions providing crypto exchange payments are prohibited. This contradicts the restriction held in December 2023, where banks were allowed to facilitate crypto transactions.
Interestingly, the central authority lifted the ban before two years after it imposed a harsh ban on banking entities entering the industry.
As said in a statement released by the CBN recently, significant global demands and rising crypto adoption finally mean that the existing tight restrictions would not be justified for financial institutions anymore.
Heightened scrutiny on Binance
The naira had been quick to fall in value and the consequent inflation of 29.9% forced the government to blink and divert its attention to services like crypto trading platforms. Trying to build a firewall against cryptocurrency trading websites that acquired fame for creating unofficial exchange rates for the naira, it disabled them. Such websites were used for executing trade behind the back of the government regulation, but this activity was always carrying a danger of too much variance in the exchange rates of the naira.
Binance regulatory woes in Nigeria dates back in 2023 when CBN raised concerns regarding “suspicious financial transactions” occurring through Binance Nigeria.
Binance is witnessing heightened challenges as its global head, Tigran Gambaryan, who is based in the US, is being detained in Nigeria. The Nigerian government summoned him to stand trial. He is accused of being involved in money laundering, five separate charges involving Howit, which came about after Nigerian officials contacted Binance regarding regulation compliance.
Nigerian security authorities arrested and detained one of the executives, Nadeem Anjarwalla, who talked to them about Binance’s regulatory problems. However, Anjarwalla escaped from detention, was later caught in Kenya, and is awaiting extradition.
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