Nigeria bans cryptocurrency trade

Nigeria’s central bank ordered deposit-taking banks and other financial institutions to immediately close accounts transacting in or operating cryptocurrency exchanges, saying such deals are “prohibited.”

Failure to comply with the directive will result in “severe regulatory sanctions,” according to a circular sent to financial institutions on Friday and published on the central bank’s website.

The country’s Securities and Exchange Commission said in September it would regulate trade in digital currencies to provide protection for investors and to ensure that transactions are transparent.

The tough stance by the central bank of Africa’s largest economy comes after protests in October against the excesses of the police’s Special Anti-Robbery Squad, known as SARS, which saw organizers accepting Bitcoins for funding after the government allegedly blocked local payment platforms for collecting donations.

"The Central of Bank of Nigeria's (CBN) circular of January 12, 2017 ref FPR/DIR/GEN/CIR/06/010 which cautioned Deposit Money Banks (DMBs). Non Bank Financial Institutions (NBFIs). Other Financial Institutions (OFIs) and members of the pubic on the risk associated with transactions in crypto currency refers," the CBN said in a statement.

"Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in crypto currencies or facilitating payments for cryptocurrency exchanges is prohibited.

"Accordingly, all DMBs. NBFis and OFls are directed to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately. Please note that breaches of this directive will attract severe regulatory sanctions".