Digital rights lawyers sue CBN, SEC over bitcoin prohibition

[Charles-Tim]

Digital rights lawyers have sued central bank of Nigeria over crypto prohibition, the lawyers, therefore, asked the court to validate the Investments and Securities Act 2007, which made SEC the apex regulatory body of the Nigerian capital market

A civil society organisation, the Digital Rights Lawyers Initiative, has dragged the Central Bank of Nigeria and Securities and Exchange Commission to court over the recent action of the apex bank that Deposit Money Banks should desist from transacting in and with entities dealing in cryptocurrencies. In Suit No. FHC/L/CS/ 188/2021 filed on Monday, February 8, 2021 at the Federal High Court in Lagos, the group said the CBN, which is the first defendant, lacked the power to restrict financial institutions from dealing in cryptocurrency transactions. The digital rights lawyers argued that the second defendant, SEC, had in a circular dated September 14, 2020, declared cryptocurrencies as legal digital assets “protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)”.

The lawyers, therefore, asked the court to validate the Investments and Securities Act 2007, which made SEC the apex regulatory body of the Nigerian capital market. They also prayed the court to declare the CBN action as “ultra vires, unconstitutional, null and void” while also seeking a “perpetual injunction restraining the 1st defendant from regulating and/or further regulating virtual currencies/ crypto currencies in Nigeria.” The suit, which has not yet been assigned to any judge, was filed on behalf of the group by its counsel, Irene Chukwukelu.

Moghalu had said there was regulatory dysfunction between the CBN and SEC. He had also argued that there was no means of exchange devoid of risk, adding that if the CBN could manage the risks of paper currency and electronic payments and other means of exchange, it should also be able to mitigate the risks associated with digital platforms such as cryptocurrencies.

https://punchng.com/digital-rights-lawyers-sue-cbn-sec-over-cryptocurrency-prohibition/

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[Wenbing]

I love the Nigeria for certain reasons;

1. The youth are very creative and are highly adaptable to prevailing situations. When the CBN issued the circular restricting cryptocurrencies transaction in the country, the youth took over twitter to discuss how possible they could continue trading crypto. Honestly, crypto is one of the opportunities for the young in the country.

2. The Youth are very outspoken. During the EndSars protest, they spoke against the government that lack the adequate leadership skills to lead the country to an enviable height. so, this digital right lawyers will support the youth in terms of how to properly regulate the space.

But, how do you regulate what you lack sufficient knowledge about?

[Rruchi man]

It is really a thing of Joy to see that they are still some crypto conscious enlightened men in the society today who are still willing and bold enough to challenge a move by the government. It is my sincere hope that the lawsuit pulls through and not become a waste of headline.

[Tstar]

I can only wish them good luck in this case and to repeat the Indian success where the Supreme Court reversed the Government crypto ban decision in 2018. 

Nigeria is full of youth people and is stupid to ban their way to the new techs.

[Hydrogen]

I wonder if this could represent bad strategy on the part of nigerian central banks. They do not hold a monopoly over the majority of crypto markets which would make a ban effective. This may only alienate business and consumers. Drive nigerians to business rivals of banks (whatever the nigerian equivalent of localbitcoins is).

AFAIK bitcoin processes transactions faster and with lower fees than nigerian banks do. The only thing central banks may accomplish here is forcing their user base to try bitcoin and realize nigerian banks may be unnecessary and perhaps even obsolete in contrast to emerging and new technologies.

[CryptopreneurBrainboss]

I wonder if this could represent bad strategy on the part of nigerian central banks.

Obviously it would, though for the short term the citizen would be at the receiving end as opportunities would be taken away from us. Already exchange like Binance has delisted trading pairs of NGN (Naira, official currency) and I'm pretty sure some project would be having second thoughts of coming into the nigerian market. Before now nigeria was a very promising market (still believe it's as this is just a temporary challenge), project hoping to penetrate into the africa market mostly goes through nigerian. We had the numbers and our trading volumes were increasing drastically.

The banks are poor, to some extent they were the reason why the peer2peer industry wasn't at the very peak as enthusiast had second thoughts before transacting with strangers. Reverse transaction occur often and network issue obstruct a smooth transaction which is why the centralized exchange began recieving more patronage as bitcoin enthusiast had rest of mind of their transaction been successful irrespective of whatever issue the banks would be having, they can always write to support and resolve the issue but that's not the case with peer2peer platforms.

AFAIK bitcoin processes transactions faster and with lower fees than nigerian banks do.

Not actually, I think the maximum charge per transaction is N50 which is $0.12 for interbank transaction with in the country and free for same bank transaction. Where bitcoin comes in handy is borderless transaction as that take days but with bitcoin it's just a matter of minutes.

[Mpamaegbu]

but with bitcoin it's just a matter of minutes.

Well, that was in the past as it takes longer now to have a transaction confirmed. I have had transactions stuck for over 48hrs on several deals. It's a shame that delayed transactions are now a common thing with Bitcoin.

In a sane society what the OP put out there about a lawsuit would gladden the minds of many because justice would be served at the end. But OP, you and I know that Nigeria is a peculiar country with no respect for rule of law and of the courts. Politicians choose what court orders to obey and that's to the ones that favour them. However, the good thing here is that Bitcoin has come to stay; whether anyone likes it or not. Nigeria is only shooting itself in the foot with that ban action.