Federal Government Initiates Legal Actions Against Four Unauthorized Cryptocurrency Traders

The authorities in Nigeria have initiated legal proceedings against four persons and several companies at the Federal High Court in Abuja, alleging that they undertook unlicensed crypto-related operations.

Documents from the court presented by The PUNCH on a recent Wednesday reveal that the parties in question are charged with facilitating unauthorized exchanges of Tether USDT to Naira, in contravention of the country’s Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.

The individuals named in the proceedings, Nnamdi Okereke, Oty Stanley, Ejiogu Chinedu, and Chukwuebuka Ogumba, are accused of carrying out specialized financial transactions without holding requisite licenses, an action that violates the Banks and Other Financial Institutions Act, 2020, as indicated by the court filings.

The state is seeking sanctions on the accused under allegations that their operations transgressed the Banks and Other Financial Institutions Act of 2020.

A section of the legal document states: “That you, NNAMDI FRANCIS OKEREKE (A.K.A GREDO) and OFFICIAL GREDO, from January 2021 to December 2021, in Abuja, within the legal boundaries of this Honourable Court, engaged in the specialized business of another financial institution without an official license, thus committing an offence against Section 57(1) and (2) of the Banks and Other Financial Institutions Act, 2020, which is punishable under Section 57(5) of the same Act.

“Furthermore, you, NNAMDI FRANCIS OKEREKE (A.K.A GREDO) and OFFICIAL GREDO, during the same period and in the same city, without being sanctioned dealers in the Nigeria Autonomous Foreign Exchange Market, engaged in the exchange of United States Dollar Tether (USDT) for Naira with the general populace, an act contrary to and punishable under Section 29(1)(c) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.”

This crackdown is part of wider scrutiny into suspected foreign exchange malpractices and evasion of taxes linked to these entities, which are implicated in contributing to the depreciation of the Nigerian Naira.

The nation’s Economic and Financial Crimes Commission has recently secured a court injunction to freeze funds exceeding N548.6m in accounts associated with individuals suspected of using crypto platforms such as ByBit and KuCoin.

Some months prior, the Central Bank of Nigeria voiced serious reservations about the trading of cryptocurrencies, especially the implications it might have on the stability of the Naira and the country’s economic health.

CBN Governor, Yemi Cardoso, has brought attention to an alarming $26bn that moved through Binance Nigeria from unknown origins over the course of the previous year, raising red flags concerning the potential for cryptocurrency to affect currency rates and economic stability.

In a bold move during May, the Securities and Exchange Commission removed the Naira from all Peer-to-Peer (P2P) trading platforms, grounding its decision on the detected risk of currency value manipulation and unlawful financial operations associated with cryptocurrency dealings.

To date, only two local exchanges, Quidax and Busha, have obtained the SEC’s approval to operate, underscoring the rigorous criteria necessary for lawful exchange activities within the nation.