The Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-graft agency, has obtained an order from the Federal High Court of Nigeria to freeze N548.6 million in bank accounts of suspected cryptocurrency users on ByBit, KuCoin, and other platforms due to their alleged involvement in naira fluctuations.
The court froze the cash based on a September 3, 2024 request that accused two prominent foreign cryptocurrency sites, ByBit and KuCoin, of contributing to the depreciation of the Nigerian Naira.
This development is part of a larger legal and prosecutorial effort by the Nigerian government authorities to deal with claims that international cryptocurrency platforms are evading taxes and violating foreign exchange laws.
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Nigeria’s continuous clampdown on crypto platforms
Remember that in February 2024, two executives of the cryptocurrency platform Binance were detained by Nigeria’s security agency based on information provided by the National Security Adviser. The information claimed to have involved money laundering and financing of terrorism on specific cryptocurrency exchange platforms.
Binance and Tigran Gambaryan are already facing money laundering charges from the EFCC amounting to $35.4 million.
In this most recent motion, ByBit, KuCoin, and several other anonymous cryptocurrency platforms are accused of facilitating the “price discovery, confirmation, and market manipulation” that led to “distortions in the market, resulting in the naira losing its value against other currencies” by their Nigerian users.
According to Okoro Philip, an EFCC investigator, Nigeria has made significant progress in stabilising its currency in recent months thanks to measures made by the Federal Government. This is demonstrated by the fact that the dollar is now trading at N980 to $1 on the black market.
He continued by saying that these gains were quickly undone on Thursday, April 18, 2024, when the dollar quickly rose from N1,250 to $1 on the black market.
“These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms,” he stated, citing more intelligence and research.
According to him, the 22 bank accounts listed in the motion and located in different Nigerian banks are owned by eager sellers of USDT who give their naira accounts in exchange for the transfer of the USDT’s naira equivalent.
He argued that the people whose accounts were found are users of ByBit, KuCoin, and other international cryptocurrency platforms. These people are not allowed to trade in foreign currencies, advertise, bargain, or exchange cryptocurrency for naira at rates that are harmful to Nigeria’s financial system.
The prosecution charged the cryptocurrency platforms, alleging that they wilfully disregarded Nigeria’s anti-money laundering rules and regulations, allowing their users to conduct business in secret.
“USDT, a digital dollar, may be exchanged for other currencies, such as the naira, on the ByBit cryptocurrency platform. There is an approximate equalisation of one USDT to one USD. The value of the naira is artificially depreciated by the exchange rates set by the users of these cryptocurrencies.
The official continued, “The willing seller receives the proceeds of this manipulation in the case identified as FHC/ABJ/CS/543/2024.”
Read also: Cryptocurrency exchange OKX to stop operation in Nigeria
EFCC accuse crypto platforms of funding terrorism
The EFCC claimed that additional intelligence had shown that these platforms are used to secretly transfer money for terrorist activities and the proceeds of crimes.
The Commission revealed that it has corresponded with every bank where the accounts are located, asking for physical copies of the specific account information. This mandate has been followed.
The bank accounts listed in the schedule belong to several people, some of whom are being investigated or prosecuted for money laundering, terrorism financing, and unauthorised foreign exchange dealings. EFCC attorney Ekele Iheanacho urged the court to freeze the bank accounts until the investigation and prosecution are finished.
AD Ishola Farms Ltd., Kora Payment Network, and Microcore Tech Investment Services’ accounts have been discovered.
On September 4, 2024, Iheanacho moved the application in open court, and Justice Emeka Nwite granted it.
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