News & Events

FEB 2021 NEWS OLUWASEUN AYANSOLA AND INA AROME

On 5 February 2021, the Central Bank of Nigeria (the “CBN”) issued a letter to all deposit money banks (DMBs), non-bank financial institutions (NBFIs) and other financial institutions (OFIs) to remind the foregoing regulated institutions that (further to its earlier circular dated 12 January 2017), dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited (the “CBN Letter”). Accordingly, the CBN directed all DMBs, NBFIs and OFIs to identify persons or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

By its clarificatory press release dated 7 February 2021 (the “Press Release”), the CBN cited inconsistency with the CBN Act 2007, high volatility, money laundering, terrorism financing, purchase of small arms and lights weapons, tax evasion, etc as reasons for prohibiting banks, NBFIs and OFIs from dealing in or facilitating cryptocurrency transactions.

We note also that the CBN has now launched an investigation into financial institutions offering services to cryptocurrency traders, according to an exclusive report published by The Cable News on 9 February 2021.

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