Economy
Luno Engages CBN to Enable Customers Withdraw Funds
By Ahmed Rahma
One of the popular platforms for trading cryptocurrencies in Nigeria, Luno, has addressed the inability of its customers to withdraw their funds.
In a statement on Friday, the cryptocurrency trading platform said its users have been unable to get their money because the Central Bank of Nigeria (CBN) has blocked access to its Naira accounts.
How it all started
In February 2021, the CBN directed all commercial banks and other financial institutions in the country to block the accounts of crypto exchanges.
It explained in a circular and a subsequent notice that the use of digital currency in Nigeria was illegal and that as an institution saddled with the responsibility to regulate the nation’s banking industry, it would not allow the use of illegal money.
“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.
Though the apex bank said the directive was with immediate effect, a window was allowed for customers of cryptocurrency exchanges to withdraw their funds.
For those who could not take back their money, it has been difficult because the banks have blocked access to the accounts in compliance with the order of the regulator.
Growing concerns of customers
The inability of some trapped customers to withdraw their funds has not gone down well with Luno, which said it was having discussions with the apex bank on ways to unblock its bank accounts to allow it to refund customers’ money.
Luno addresses the issue
In the statement released today, the firm assured that it would make the refund to its clients as soon as it gets the green light from the central bank.
“We are still in communication with the CBN and are hopeful that they’ll soon grant us access to our accounts to be able to payout Naira,” a part of the statement said.
“As soon as we are able to get access to our accounts, Nigerians will be able to withdraw. In the meanwhile, rest assured that your funds are completely safe and we are on your side,” Luno assured.
Discrepancies in Bitcoin rates
Meanwhile, Luno has addressed the concerns raised by some of its customers as regards the rate the Bitcoin and other digital tokens are sold on its platform.
Some cryptocurrency traders in Nigeria had claimed the value of the Bitcoin on Luna was higher than its competitors, forcing some of them to migrate.
But Luno said the price of Bitcoin on each platform is majorly determined by the forces of demand and supply.
“Firstly, the price of Bitcoin is determined by supply and demand, not Luno or any other cryptocurrency exchange.
“Each platform and country has its own unique marketplace with its own drivers of demand,” the company stated.
“The recent CBN directive has meant Naira withdrawals are no longer possible.
“Buying Bitcoin is the only way for Nigerians looking to send the Naira they still have in their accounts.
“This means there is now a power imbalance favouring the seller, causing higher prices.
“Secondly, the ban has also created market inefficiencies that remove the correlation between different crypto exchanges, resulting in significant price differences from one exchange and another,” it further said.
Luno silent on P2P adoption
Meanwhile, the company has remained silent on the possibility of its users in Nigeria to transact cryptocurrency through the peer-to-peer (P2P) system.
In a previous statement, Luno had maintained that it was not planning to consider the use of P2P to trade the digital coins on its platform.
However, a few of its competitors, including Binance, Paxful, amongst others, have adopted this system to beat the ban of cryptocurrency trading in Nigeria.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
