Cryptocurrency groups in Nigeria prepare to take on the country’s central bank, as both sides consider a controversial regulatory move to limit the use and trade of crypto in the African-populated country of the west.
The decision or policy of the Central Bank of Nigeria (CBN) requires legacy commercial lenders to arbitrarily report and close individual and corporate accounts linked to bitcoin and other digital assets.
CBN reinforced that move earlier this month to specifically target young Nigerians between the ages of 18 and 30 – a demographic primarily active in crypto. Critics called the central bank’s actions “financial terrorism with state backing.”
“The crackdown on cryptography is not backed by the law”
The Blockchain Industry Coordinating Committee of Nigeria (Biccon), an umbrella body representing the country’s three major crypto organizations, warned the central bank on November 22, saying its decision was not supported by any laws in Nigeria.
In a statement shared with BeInCrypto, Biccon Secretary General Senator Ihenyen called on everyone affected by the central bank’s decision to sue both the CBN and the former bankers who back it.
He wiped out traditional financial institutions, berating their “questionable actions” in shutting down crypto-related accounts without due process. Several crypto enthusiasts have since lost access to their bank accounts, either because they have been closed or frozen.
“Relevant individuals and entities are advised to seek legal advice for the purpose of assessing the individual circumstances of their case,” Ihenyen said in the statement.
“When informed that their right has been violated without legal justification, legal redress must be sought in our courts accordingly,” he added.
Nigeria’s central bank banned cryptocurrencies in February, preventing local lenders from working with digital asset companies.
On October 25, he then launched his central bank digital currency (CBDC), e-naira, which he hopes will increase Nigeria’s gross domestic product to $ 29 billion over the course of the next decade. The umbrella bank, which maintains control over monetary policy, is keen for the e-naira to succeed.
Ihenyen accused the CBN of having “exceeded its statutory limits” and of having “encroached upon the legislative powers of the National Assembly, contrary to the provisions of Chapter 4 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) ”.
Without a law to “criminalize or illegalize” cryptocurrency trading in Nigeria, Ihenyen reiterated that the actions of the central bank in ordering the closure of bank accounts simply because someone was involved in bitcoin constituted an abuse of power.
He also pointed out that crypto users do not necessarily violate national laws against money laundering and terrorism. Even if suspected of such activity, he said, Nigerian laws “do not contemplate the freezing of individual or specific accounts, not the general closure of accounts of a set of people, entities or an entire industry. … ”
Biccon had previously warned that failure to remove or revise CBN’s anti-crypto policy as published in February this year could “set a dangerous precedent.” In its latest statement, the body expressed disappointment at the central bank’s lack of engagement, despite efforts by the local crypto industry to do so.
“We reject the undue discrimination against the Nigerian blockchain and crypto industry,” Biccon said.
Biccon is made up of Blockchain Nigeria User Group (Bnug), Cryptography Development Initiative of Nigeria (Cdin), Stakeholders in Blockchain Technology Association of Nigeria (Siban), the three largest crypto organizations in Nigeria. The country is Africa’s largest crypto market.
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