Nigerian Court Freezes N548.6 Million in Accounts Linked to Cryptocurrency Traders

• Nigerian court freezes N548.6 million from ByBit and KuCoin users over alleged currency manipulation.
• The EFCC links crypto platforms to the naira’s value drop, citing illegal forex trading activities by their users.
• Nigeria’s SEC intensifies oversight as it approves preliminary licenses for two digital asset exchanges.

A Nigerian Federal High Court has ordered the freezing of N548.6 million in bank accounts linked to cryptocurrency platforms, including ByBit and KuCoin. The accounts are suspected of contributing to fluctuations in the value of the naira. The Economic and Financial Crimes Commission (EFCC) filed a motion on September 3, 2024, seeking to address the alleged manipulation of the currency through foreign crypto transactions.

Platforms Accused of Contributing to Naira Depreciation

The motion accuses ByBit, KuCoin, and other platforms of playing a significant role in the naira’s depreciation. According to the EFCC, these platforms facilitated market manipulation and currency fluctuations, leading to a substantial drop in the naira’s value against other currencies. As part of a broader legal effort, the federal government is investigating foreign cryptocurrency platforms for potential violations of tax laws and foreign exchange regulations.

Earlier this year, Nigerian authorities arrested two executives from Binance, another prominent cryptocurrency exchange. The arrests were based on intelligence from the National Security Advisor, which accused the platform of money laundering and terrorism financing. In addition, Binance and one of its key executives, Tigran Gambaryan, face a lawsuit over $35.4 million worth of money laundering charges.

In its latest court motion, the EFCC accuses the platforms of allowing Nigerian users to manipulate the naira market through crypto trading. An investigator from the commission, Okoro Philip, stated that recent government currency stabilization efforts were undermined by market disruptions. He noted that despite a period of relative stability, the naira’s value dropped from N980 to N1,250 per dollar due to trading on platforms like ByBit and KuCoin.

Cryptocurrency Sellers Under Scrutiny

The EFCC’s motion identifies 22 bank accounts in various Nigerian banks, which are linked to sellers of USDT (Tether) on these platforms. These individuals are accused of engaging in illegal foreign exchange transactions by trading cryptocurrency for naira. According to the EFCC, these trades harmed Nigeria’s financial stability and violated anti-money laundering regulations.

Future Regulatory Actions by the SEC

Nigeria’s Securities and Exchange Commission (SEC) is preparing to intensify its scrutiny of cryptocurrency exchanges and users. In a recent statement, SEC Director-General Dr. Emomotimi Agama reaffirmed the commission’s commitment to investor protection. The SEC has also recently approved preliminary licenses for two digital asset exchanges, Busha and Quidax, under a regulatory incubation program.