CBN Closes Bank Accounts of Luno, Other Crypto Currency Exchanges

February 5, 2021

By Dipo Olowookere

The Central Bank of Nigeria (CBN) has ordered the immediate closure of bank accounts operated by cryptocurrency exchanges in the country.

Lately, Nigerians have been investing in digital coins and have been making gains, hurting the other forms of investments like equities, bonds, treasury bills and others.

Apparently worried by this development, the apex bank has asked all Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Non-Banks Financial Institutions (NBFIs) to with immediate effect shut down the accounts operated by entities which facilitate the trading of digital currencies.

Business Post reports that there are different platforms used by investors in Nigeria to trade cryptocurrencies and popular among them are Luno, Quidax, Binance, NairaEx, amongst.

“The CBN circular of January 12, 2017, ref FPR/DIR/GEN/CIR/06/010 which cautioned DMBs, NBFIs, OFIs and members of the public on the risk associated with transactions in cryptocurrency refers.

“Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

“Please note that breaches of this directive will attract severe regulatory sanctions,” a circular dated February 5, 2021, signed by the Director of Banking Supervision, Bello Hassan, said.

In 2018, Business Post reported that the then spokesman of the CBN, Mr Isaac Okorafor, had warned Nigerians to be wary of investments in cryptocurrency, stressing that virtual currencies are not legal tender in Nigeria.

He had stressed that cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and exchanges such as NairaEx were not licensed or regulated by the CBN.

Mr Okorafor had further emphasised that dealers and investors in any kind of cryptocurrency in Nigeria were not protected by law, thus may be unable to seek legal redress in event of failure of the exchangers or collapse of the business, warning Nigerians to be cautious against investing in cryptocurrency as doing so would be at their own risk.

CBN Crypto Currency

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

Leave a Reply

Ecobank Nigeria
Previous Story

Ecobank to Raise $300m Eurobond for International Trade

Nigeria Customs Service
Next Story

Oyo/Osun Customs Generates N4.9bn in January

Latest from Economy