The Central Bank of Nigeria (CBN) found itself compelled to refute a report alleging the issuance of a directive mandating banks and financial institutions to identify individuals or entities involved in transactions with cryptocurrency exchanges. This directive purportedly aimed to maintain "no debit" (PND) status on such accounts for six months. A "no debit" order restricts certain transactions on a customer's account, effectively prohibiting them from making withdrawals or payments.
Following the initial denial of the report on social media platform X, the CBN later deleted this denial, causing confusion. However, the central bank subsequently reaffirmed that the accusations were false. The purported directive also indicated measures to crack down on individuals illegally buying and selling Tether (USDT) on specified platforms, particularly those utilizing peer-to-peer (P2P) methods.
Furthermore, the alleged notification stipulated that regulated financial institutions were prohibited from involvement in cryptocurrencies or facilitating cryptocurrency transactions. This directive seemingly contradicted the previous ban lifted in December 2023, permitting banks to facilitate transactions on cryptocurrency exchanges.
Nearly two years after imposing a blanket ban on banks’ participation in digital currency operations, the CBN lifted the ban. This decision stemmed from the acknowledgment that the increasing global demand for and adoption of cryptocurrencies rendered the stringent restrictions imposed in 2021 unreasonable. However, with the rapid depreciation of the naira and subsequent inflation, the government redirected its focus to platforms offering cryptocurrency services, banning websites associated with cryptocurrency trading that were known for setting informal valuations in naira.
Binance, a prominent cryptocurrency exchange, faced intensified scrutiny when the CBN expressed concerns about "suspicious financial transactions" involving Binance Nigeria in 2023. CBN head Olayemi Cardoso disclosed that approximately $26 billion was transferred through Nigeria via Binance in 2023 by unidentified sources and users. Binance encountered additional challenges in Nigeria, where its U.S.-based executive Tigran Gambaryan was detained and faces charges related to money laundering following discussions with Nigerian officials over regulatory compliance issues. Another executive, Nadeem Anjarwalla, who engaged with Nigerian officials on Binance's regulatory concerns, escaped from jail and was traced to Kenya, where extradition proceedings are underway.
