The Economic and Financial Crimes Commission (EFCC) received orders from Justice Emeka Nwite of the Federal High Court of Nigeria to freeze about 548 million Naira in the bank accounts of some Nigerian crypto users.
Notably, these users traded on exchanges like KuCoin, ByBit and others. This regulatory action by the EFCC is due to suspected manipulation of the Naira through these users’ activities.
In the motion filed on September 3 to freeze the bank accounts, the implicated exchanges like ByBit and KuCoin were accused of granting Nigerian users access to engage in unethical activities on their platforms.
These included price discovery, market manipulation and price confirmation. These were stamped as illegal by the Nigerian High Court and caused the value of the Naira to depreciate.
The profit from manipulating the market in such a way goes to the users who trade them on the exchange platforms. This could be a potential means for money laundering and violating the Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) laws.
Thus, speculations arise about these crypto exchanges, including KuCoin and ByBit that break these laws by condoning these activities on their platforms.
Thus, the EFCC collaborated with the banks where the P2P domiciliary accounts are linked to, to freeze the accounts of the users. Noteworthy is that the total funds frozen in these accounts across the implicated exchanges sum to 548 million Naira.
Crypto Use in Nigeria is Still Under Scrutiny.
The nation lifted its ban on crypto in September 2023 and has recently given partial approval to crypto firms to operate within the country.
Yet crypto activities within the country are still under heavy scrutiny from regulators like the Security and Exchange Commission (SEC) and the EFCC. This recent issue with ByBit and KuCoin trading platforms further complicates things.
Meanwhile, the country has detained an executive of the largest crypto exchange in the world, Binance for more than 6 months now. All these point to the uncertain and erratic nature of the crypto industry in Nigeria.