Crypto Companies Return ₦160 Million to Federal Government Following Charges of Unauthorized USDT-Naira Exchange Transactions

Latest Update:

• Following legal action, the Federal Government has reclaimed a total of ₦160 million from two local cryptocurrency enterprises, Paparaxy Global Ventures Limited and Lemskin Technologies Limited, due to their operation of financial services without an official license.
• The firms faced allegations of engaging in illicit USDT to Naira trades and operating without requisite financial authorization.
• The reveal came about as a result of a plea agreement made with the Economic and Financial Crimes Commission (EFCC), according to a report by Nairametrics.

Under the plea agreements, Paparaxy returned ₦140 million and Lemskin repaid ₦20 million to the Federal Government. In addition to the refund, the company directors are to provide an affidavit affirming future lawful conduct to the Court.

The EFCC presented this arrangement at a court session presided over by Justice James Omotosho at the Federal High Court in Abuja, on Monday, October 14, 2024.

The EFCC prosecutor, Ogechi Ujam, announced the settlement and plea agreement during the hearing, asking for a near date to finalize the plea agreement.

Subsequently, Justice Omotosho postponed the proceeding to October 22, 2024, to formally accept the plea agreement.

Both Paparaxy Global Ventures Limited and Lemskin Technologies Limited were sued by the federal government for illegal financial activity without valid licenses.

They were accused in suits filed in June and July 2024 of unauthorized USDT-Naira exchanges from 2021 to January 2024, which contravened the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.

The plea bargain enables the accused entities to confess to lesser charges in exchange for mitigated penalties. In this instance, they agreed to remit ₦160 million to the government as part of the settlement.

This case is part of a wider initiative to regulate illicit cryptocurrency transactions in Nigeria.

In September 2024, the EFCC secured a court mandate freezing funds amounting to ₦548.6 million linked to individuals and firms involved in illegal forex trades on platforms such as ByBit and KuCoin, which were associated with Naira volatility and money laundering allegations.

This ongoing investigation targets various individuals involved in illegal forex dealings, with offenses ranging from money laundering to funding terrorism, all of whom are either currently under prosecution or investigation.

The plea agreements serve as a signifier of the government’s commitment to recoup funds and fortify its regulations particularly in the dynamic realm of digital currencies.