The Central Bank of Nigeria (CBN) has refuted a report claiming it issued a directive mandating banks and financial institutions to identify individuals or entities involved in transactions with cryptocurrency exchanges, placing such accounts on Post No Debit (PND) instruction for six months.
A “Post No Debit” (PND) instruction restricts certain transactions on a customer’s account, prohibiting debit transactions, including withdrawals and payments.
Initially denying the report, the CBN later retracted its denial, confirming the allegations were false.
The bank asserted its commitment to identifying and penalizing those engaging in illegal buying and selling of Tether, particularly through peer-to-peer (P2P) methods.
The purported circular also indicated that regulated financial institutions involved in crypto or facilitating payments for crypto exchanges are prohibited.
However, this conflicts with a previous ban lifted in December 2023, allowing banks to facilitate transactions for crypto exchanges.
The CBN lifted the ban nearly two years after implementing a comprehensive ban on banks’ involvement with digital currencies.
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In a statement, the CBN acknowledged the global surge in demand and adoption of crypto, deeming it unjustifiable to maintain stringent restrictions on financial institutions as imposed in 2021.
However, amidst the rapid devaluation of the naira and an inflation rate of 29.9%, the government shifted focus to platforms offering cryptocurrency services.
It disabled websites associated with crypto trading, known for setting informal valuations for the naira.
Binance faced significant scrutiny when the CBN expressed concerns over “suspicious financial transactions” through Binance Nigeria in 2023.
CBN head Olayemi Cardoso disclosed that $26 billion had flowed through Nigeria via Binance in 2023 from unidentified sources and users.
Further complicating matters, Binance executive Tigran Gambaryan, based in the United States, was detained in Nigeria, facing five charges related to money laundering following discussions with Nigerian officials regarding Binance’s regulatory compliance.
Another executive, Nadeem Anjarwalla, who participated in these discussions, subsequently escaped custody and was tracked down in Kenya, facing extradition.
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