The Nigerian regulator has reportedly freezed N548.6M (about $670,000), supposedly in the account of users of cryptocurrency platforms, Bybit, and KuCoin.
EFCC— Economic and Financial Crimes Commission, following a court order they obtained from the Federal High Court, has freezed N548.6M belonging to crypto traders.
Details of the alleged undermining of Naira by Bybit and KuCoin
According to the EFCC, Bybit, KuCoin and other several crypto platforms have opened the door for Nigerian users to engage in “price discovery, confirmation, and market manipulation” through their platforms, thereby causing “distortions in the market, resulting in the naira losing its value against other currencies.”
An EFCC investigator, Okoro Philip, mentioned that in April 18, 2024, there was a plummet in the naira’s value, going from N980 to N1,250 to $1 USD on the black market, hence drawing back months of the government’s efforts to stabilize the currency.
He went further to state in his affidavit, “These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms.”
He mentioned that the 22 bank accounts outlined in the motion are Naira accounts created from Nigerian banks and they are foreign exchange traders, giving their naira in exchange for the transfer of the USDT’s naira equivalent and vice versa.
Philip asserted that the owners of these accounts are users of KuCoin and Bybit as well as other foreign cryptocurrency platforms who are not endorsed to transact in foreign exchange, advertise, negotiate, or carry out cryptocurrency exchanges to naira and vice versa at rates fatal to Nigeria’s financial system.
The cryptocurrency platforms were indicted and accused by the regulator, for intentionally overlooking and being negligent of Nigeria’s anti-money laundering laws and regulations, aiding users of their platforms to operate under a cover of secrecy.
“ByBit is a cryptocurrency platform where the exchange of USDT (a digital dollar) to other currencies, including the naira, takes place. One USDT is approximately equivalent to one United States dollar (USD). The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value.”
“The proceeds of this manipulation go into the account of the willing seller,” the official added in the case marked FHC/ABJ/CS/543/2024.
What You Should Know
The motion to freeze the bank accounts was presented by EFCC counsel, Ekele Iheanacho, on September 4, 2024, and granted by Justice Emeka Nwite.
The research of the EFCC unveiled that returns of crime and funds for terrorist activities are secretly exchanged through these platforms. They also made known in their written request to all the banks harbouring the accounts, asking for hard copies of the identified account details.
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