Freeze of Nigerian Central Bank User Accounts on Bybit, KuCoin, OKX, and Binance

The Central Bank of Nigeria (CBN) has issued a directive that requires all banks and financial institutions to identify individuals or entities involved in transactions with cryptocurrency exchanges. These accounts must then be placed on a Post No Debit (PND) instruction for a period of six months. A PND instruction is a directive that restricts certain transactions on a customer’s account, meaning they cannot withdraw funds or make payments using the affected account.

The CBN has specifically listed Bybit, KuCoin, OKX, and Binance crypto exchanges as not being licensed for operations in Nigeria. The bank has stated that it will crack down on anyone who is illegally buying and selling Tether (USDT) on these platforms, particularly those using peer-to-peer (P2P) methods. The CBN has declared that regulated financial institutions engaged in crypto or facilitating payments for crypto exchanges are prohibited.

This directive contradicts a previous ban that was lifted in December 2023, allowing banks to facilitate transactions for crypto exchanges. The Central Bank had originally banned banks from engaging with digital currencies but lifted the ban after realizing the increasing global demand and adoption of crypto. Due to the devaluation of the naira (Nigeria’s currency) and the high inflation rate of 29.9%, the government has shifted its focus to platforms offering cryptocurrency services.

Binance, one of the listed crypto exchanges, has faced significant scrutiny in Nigeria. The CBN raised concerns about “suspicious financial transactions” occurring through Binance Nigeria in 2023. It was revealed that $26 billion had passed through Nigeria via Binance from unidentified sources and users. Binance’s executive, Tigran Gambaryan, who is based in the United States, was detained in Nigeria and is now facing five charges related to money laundering after a meeting with Nigerian officials regarding regulatory concerns.

Another executive, Nadeem Anjarwalla, who had come to Nigeria to address Binance’s regulatory issues, escaped custody and was later tracked down in Kenya, where he faces extradition. These incidents have added to the challenges faced by Binance in Nigeria.

The CBN’s directive aims to regulate cryptocurrency transactions in Nigeria and restricts banks and financial institutions from working with unlicensed crypto exchanges. The recent focus on cryptocurrency services is a response to the devaluation of the naira and the government’s concerns about illegal financial transactions.

Vinnie Glazier

Vinnie Glazier

7 thoughts on “Freeze of Nigerian Central Bank User Accounts on Bybit, KuCoin, OKX, and Binance

  1. It’s important for banks and financial institutions to be diligent in identifying and working only with licensed crypto exchanges. This directive will help ensure trust and security in the market. 🏦🔒

  2. I hope this directive helps establish a safer and more secure environment for cryptocurrency transactions in Nigeria. Security should always be a priority.

  3. This directive will ensure that only licensed crypto exchanges can operate in Nigeria, which is a necessary step toward a more regulated market. 🇳🇬🔒

  4. Binance seems to be in hot water in Nigeria. It’s important for exchanges to operate transparently and within the regulations of the country they’re in. 🌊🔥

  5. The CBN’s actions only create more mistrust and uncertainty in the financial system. We need stability and trust, not more restrictions and limitations.

  6. I can understand why the CBN is concerned about illegal financial transactions, but I hope this directive doesn’t stifle the growth of the crypto industry in Nigeria.

  7. It’s great to see Nigeria embracing the opportunities that crypto services can provide, especially given the high inflation rate.

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