Nigerian Banks To Close Accounts Involved with Crypto

[Darker45]

Imo I don't think this news will change much for the Nigerian Bitcoin community, from the information I've garnered, withdrawals of crypto funds to naira from centralized exchanges is still working fine as of yet, I know it's prolly a matter of time before most exchanges block Nigerians from using their services, but then the option of P2P trade remains sufficient for crypto users in Nigeria.

The news is pretty surprising cause I don't think the government had previously voiced their dissatisfaction on cryptocurrencies, neither have their been high profile cases of scams coming from Nigeria (correct me if I'm wrong). The Nigerian government prolly have something up their sleeve, being the corrupt/manipulative set that it is.

Although the directive has immediate effect, I think the actual crackdown on individual users and institutions would take some time. But regulated exchanges will surely be acting more careful on this. They're registered and licensed, after all.

While withdrawals are still allowed, I think deposits have already been suspended. Withdrawals are expected to take time and exchanges cannot just suspend it immediately following the government order. Account owners are not expected to get informed of the announcement immediately and act on it right away.

I reckon P2P trades with registered centralized exchanges such as Binance would certainly be affected as well. I doubt NGN would remain accepted in such centralized platforms.

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[Yogee]

Banks does not want bitcoin, it's a threat for them. Good thing they are only closing the account, not confiscating it.

They will be in a lot of trouble if they will confiscate other people's money. They will need to prove that it came from illegal activities.

Do we know if account closures are being enforced? China comes to mind as a nation notorious for making announcements of crypto bans without following through on them.

Perhaps the Nigerian bitcointalk community can update us on this. Charles-Tim

Imo I don't think this news will change much for the Nigerian Bitcoin community, from the information I've garnered, withdrawals of crypto funds to naira from centralized exchanges is still working fine as of yet, I know it's prolly a matter of time before most exchanges block Nigerians from using their services, but then the option of P2P trade remains sufficient for crypto users in Nigeria.

It is just right for exchanges to allow withdrawal of user funds to banks before their accounts are blocked. Do they still allow fiat deposits? stompix shared the news that Binance Nigeria suspended it already.

.....
You are comparing two countries with a combined population of 2.7 BILLION people with a country that is located in the most unfavorable region of the planet (in political and economic terms) in which 200 million people live, of which 1% knows in general what a cryptocurrency is in principle. Half of the population lives below the poverty line, and 70% works in agriculture. Do you understand that this is not even a country but a real "banana republic" that live in 19 century?

I am comparing the effects it had on the people where ban was imposed and to the entire crypto ecosystem and not just the population or the percentage of crypto users there. Your comment is coming of as you don't really care if it happened in a country that has a small crypto adoption rate.  You probably only care if it caused FUD and price dumps.

I'm not belittling Nigeria I'm just saying that cryptocurrency is generally the last thing that can worry you if you live in Nigeria.

I doubt the crypto community in Nigeria would agree with you. Don't you think of the ripple effect the success of the 1% who are involved in cryptocurrencies would be? Now that there is a ban, the 99% wouldn't even dare to touch crypto once they heard of it.

The spread of cryptocurrency in a place where the main problem is survival and what to eat tomorrow and how not to have another (fifth in a month) coup d'etat-this is really something on the level of "If they don't have bread, then let them eat cakes".

Why do you think there are airdrop and bounty hunters coming from Nigeria? They saw cryptocurrencies as an avenue to help them survive and to put food on their table. I don't think I'm wrong if I say that their numbers are increasing because one hunter would invite their friends and family to try since he also made money doing it. The ban would make life harder for them since they will have to resort to other means of converting their rewards to fiat.

[iamsheikhadil]

A similar thing happened in India when cryptocurrency exchanges had their bank accounts freezed and only P2P was the way out for crypto users to convert their crypto to diat and vice-versa, trading was affected a lot as well. But in 2020, the supreme court removed those restrictions thankfully. Nigerian banks should re-consider these decisions, they might place taxes on crypto profits, but just banning it completely is very counterproductive and not good in my opinion.

[adaseb]

This reminds me of what crypto was back in 2012-2013 in North America. Banks didn't really ban crypto however if you had too many transaction related to crypto such as transfer too and from bitcoin exchanges or any P2P deals then most likely your account would get closed. The reason for this was due to the SilkRoad bust and they assumed that if you are dealing with bitcoin, you are most likely doing something illegal.

Now fast forward 7-8 years and the landscape has changed. Most banks are well aware of crypto and these days its more assumed that if someone buys or sell bitcoin, they are an investor instead of a drug dealer. I remember a guy in my area who ran a few bitcoin ATMs, his biggest hurdle was dealing with banks because every few months their accounts would get closed down and they would have to find another bank to deal with, was very frustrating.

[Farma]

Seems like Binance is acting faster than Nigerian Banks:
https://www.coindesk.com/binance-suspends-deposits-in-nigeria-following-central-bank-directive

The news is one day old but I don't see any serious change in the volume pairs, except for the USDT/NGN, change that for me makes little sense right now, why the dump?
https://www.binance.com/en/trade/USDT_NGN

I think Binance respects the policies adopted by Nigeria and has temporarily suspended deposits for matters concerning Nigeria. this is the right thing for binance to do.

besides, it doesn't really affect the market. even bitcoin still has the potential to go up to over $ 40k for now.

based on the article mentioned, many Nigerian people do not agree with this, even they have made hashtags about this more than 26,000 times. however, I think this will be the same as India doing, and I hope there will be no significant effect on crypto.

[Rruchi man]

This new development has been met with major criticism from both the citizens in that country and other onlookers from around the globe. It is however noteworthy to state that developments and policies like this usually spearhead the popularity of crypto among those who would have never heard of it. With recent statistics showing that the country is the second largest after the United States with crypto investors, i only see a situation where P2P style of transaction is promoted.

[Obito]

A similar thing happened in India when cryptocurrency exchanges had their bank accounts freezed and only P2P was the way out for crypto users to convert their crypto to diat and vice-versa, trading was affected a lot as well. But in 2020, the supreme court removed those restrictions thankfully. Nigerian banks should re-consider these decisions, they might place taxes on crypto profits, but just banning it completely is very counterproductive and not good in my opinion.

Nigeria's current crypto situation is a little different than the India, Nigeria is more receptive to crypto than India and this is the first problem encountered in Nigeria that involves crypto that made headlines. India on the other hand, have an on and off relationship with cryptocurrency with now currently making the possession a criminal offense. Hopefully, the will of the people will rule out more than the CBN's will to ban usage of crypto.

[CryptopreneurBrainboss]

You should expect your accounts to be suspended soon if you've transacted with Binance Nigeria and other exchanges or custodial service using your bank account before. I hope you will find other ways to convert your cryptocurrencies to fiat and vice versa. Are there enough merchants that you can deal with P2P?

I have transacted with binance exchange severally involving my bank both for withdrawal and deposit, did another trade after I saw the news and will be doing another before the day ends let see if they'll block my account. Jokes on them if they do because I hardly store fiats in bank. My peer2peer service has be booming locally too since the news dropped.



You can also see it having it's effect on the exchange as Naira dropped from above N480 to below N440 on the binance exchange (NGN/USDT) although it's beginning to recover and now trading above N460. The merchant are quite much, before binance, luno etc all came into the game we have been transacting peer2peer. The average nigerian bitcoin investors buy from another individual instead if the exchanges so it won't have much impact instead bring about more enthusiast to the industry.

[SquallLeonhart]

Nigeria is really not doing themselves a favor if they do this, at the end of the day crypto is something third world nations need more than anyone else. In Nigeria 10 bucks is not a bad amount of money, you can definitely live a very decent life with 10 dollars per day, in USA people are talking about mcdonalds workers should get 15 dollars PER HOUR and that is about 150 bucks per day if you work 10 hours.

In Nigeria getting 300 dollars per MONTH is more than enough to live a decent life. This is why I think it is quite important that Nigeria accepts crypto, actually supports it, because people in Nigeria could work freelance and remote jobs for other companies in bigger nations and get 300-500 bucks a month and live a very good life, there is really no logic behind keeping them at this low level when you can find a way to make them live richer this way.

[Claudio99]

Imo I don't think this news will change much for the Nigerian Bitcoin community, from the information I've garnered, withdrawals of crypto funds to naira from centralized exchanges is still working fine as of yet, I know it's prolly a matter of time before most exchanges block Nigerians from using their services, but then the option of P2P trade remains sufficient for crypto users in Nigeria.

The news is pretty surprising cause I don't think the government had previously voiced their dissatisfaction on cryptocurrencies, neither have their been high profile cases of scams coming from Nigeria (correct me if I'm wrong). The Nigerian government prolly have something up their sleeve, being the corrupt/manipulative set that it is.

The two platforms that accepts naira bank deposit and withdrawal are closed down already, Luno naira deposit is down and binance too, honestly I have no other ways than these two, the problem is from some corrupted youths in the country, they engage in romance scam and ask their victims to buy them bitcoin, FBI leaked the information to Nigeria government that's why they ban crypto

[skarais]

Is this news the main reason why the market started burning today ? The marketcap has decreased and it may mean that this will be the start of a major correction in the near future. I hope that what I think does not happen anytime soon and also deeply regret how bad the Nigerian government's decision is to enforce the rule. Even though the trader and investor there still have a way out, the government must be able to facilitate problem that can improve the population's economy. I don't think they need to close the entrance for bitcoin or crypto there, that would be a shame.

[stompix]

The average nigerian bitcoin investors buy from another individual instead if the exchanges so it won't have much impact instead bring about more enthusiast to the industry.

Three is one problem with this p2p scenario, you can't disconnect a country from the global trade without that having consequences.

In each country the number of coins held by traders is finite and it's either smaller or larger than the demand if the demand grows explosively and traders are unable to get this amount from other sources like global exchanges with high liquidity the prices are going to run amok, it happened before and it will happen again.
As bad as centralized exchanges are they offer immense sources of liquidity to all markets, so if a spike happens on one national market arbitrage will kick in and traders will buy from foreign exchange and sell p2p or f2f in their country to balance the books and bring the price in line with others.

If all exchanges will follow what Binance has done then this whole process will have to find a different route, which is slower and costlier for all parties, it somehow looks like an embargo on a product, there is demand in the country but you have to smuggle the merchandise from outside.
I know some hardcore fans will try to brush this aside as nothing that would be able to harm the trade but if properly enforced it's going to be a pain in the ass.

based on the article mentioned, many Nigerian people do not agree with this, even they have made hashtags about this more than 26,000 times.

I wonder how many years have to pass so that people will finally understand that hashtags and claps and angry youtube videos are useless.

[Ziskinberg]

Is this news the main reason why the market started burning today ? The marketcap has decreased and it may mean that this will be the start of a major correction in the near future. I hope that what I think does not happen anytime soon and also deeply regret how bad the Nigerian government's decision is to enforce the rule. Even though the trader and investor there still have a way out, the government must be able to facilitate problem that can improve the population's economy. I don't think they need to close the entrance for bitcoin or crypto there, that would be a shame.

I don't think it's a big news that would affect the market badly, Nigeria is not a big market in crypto, and even if it will affect to dump the price, it would still recover. Remember, crypto market survive the news on bitcoin ban in China, that was way bigger than this news.

[marcbitcoins]

You should expect your accounts to be suspended soon if you've transacted with Binance Nigeria and other exchanges or custodial service using your bank account before. I hope you will find other ways to convert your cryptocurrencies to fiat and vice versa. Are there enough merchants that you can deal with P2P?

I suggest that they look for someone that they can trust who lives outside Nigeria with a Foreign account that accepts cryptocurrency transactions and connects them with their fiat local account. I know it's hard to do but there is probably nothing wrong with trying unless the punishment is imprisonment.

[palle11]

I suggest that they look for someone that they can trust who lives outside Nigeria with a Foreign account that accepts cryptocurrency transactions and connects them with their fiat local account. I know it's hard to do but there is probably nothing wrong with trying unless the punishment is imprisonment.

I think they can also open a foreign account if the issue of closure is only about naira account with the banks. They can as well open a dollar account with binance and link it with the bank then transaction can just change to dollar instead of naira and they withdrew dollar instead of the local currency.

[Ucy]

Interesting.
I think it's better they regulate the institutions dealing in Crypto rather than let them go elsewhere where they will likely pay taxes and contribute to the economy/society
What the people in position of authority should focus on is making sure that cryptocurrency aren't abused/misused by users.  Cryptocurrency platforms/businesses that wish to do business with a country should be required to follow the good national standards for regulating businesses and keeping financial institutions safe for users/stakeholders.



Wish I know why they consider cryptocurrency risky. I believe they could make it less risky if that is really important to them.

[lixer]

Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

- https://www.cbn.gov.ng/Out/2021/CCD/Letter%20to%20All%20Banks%20on%20Crypto%20Currency.pdf

You should expect your accounts to be suspended soon if you've transacted with Binance Nigeria and other exchanges or custodial service using your bank account before. I hope you will find other ways to convert your cryptocurrencies to fiat and vice versa. Are there enough merchants that you can deal with P2P?

https://bitcointalk.org/index.php?topic=5315206.0  If you check this topic it says that Nigera is the fastest growing bitcoin nation in the world, to close bank accounts involved with crypto in the second fastest growing community is the worst thing they could have ever done.

This is not something that is political for them, this is not something that requires a liberal stand point neither, it is something that is nationalistic for all these nations that are poorer than big countries.

Sure in USA you could go on with USD and people who use bitcoin sends a message, but in Nigeria people need money, and if there is a method where people could work with foreigners and make money and get dollars from them into their nations, that makes the nation richer as well because dollars go into Nigeria making Nigeria stronger in economy that way. However they really couldn't see that apparently.

[Stedsm]

This has been the worst decision they've taken and Indian government too looks to be walking on the same path and looking to ban crypto here, when all other countries and major institutions are trying to get their hands on the world's most expensive cryptocurrency - Bitcoin. It's like getting back to the ancient era and this will surely not be in their benefits because nobody is going to follow this and will surely bring in new ways while opposing their decisions openly.

[Yogee]

The Central Bank of Nigeria issued a response and clarification to their recent crypto ban and you can find it on their official website https://www.cbn.gov.ng/

I cannot paste the direct link to the PDF without the %20 bs but Coindesk also uploaded the five page document here https://www.scribd.com/document/493681467/CBN-Press-Release-Crypto-07022021#from_embed

According to the letter, it was just a reiteration of previous circulars,

As regards our recent policy pronouncement,  it is important to clarify that the CBN circular of  February 5, 2021  did  not  place  any  new  restrictions  on  cryptocurrencies,  given  that  all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies . Indeed, this position was reiterated in another CBN Press Release dated February 27, 2018.

And then we have the usual excuse,

....based of the significant risks that transacting in cryptocurrencies portend-risk  of  loss  of  investments,  money  laundering,  terrorism  financing,  illicit  fund  flows  and criminal  activities.

It's also funny that they have to use other countries that imposed restriction and Warren's previous statements to justify their action,

Even  famed  investor  Warren  Buffett  has  called  cryptocurrencies  "rat  poison  squared,"  a "mirage," and a "gambling device." Mr. Buffett believes it is a “gambling device” given that they are mostly valuable because the person buying it does so,not as a means of payment; but in the hope they can sell it for even more than what they paid at some point.

They also mentioned other personalities but I don't think I need to put them all here.

To put it shortly, they do not know how it really works and they are using opinions of other countries or personalities that are against bitcoin. They are not willing to follow the steps done by Japan and other countries favorable of bitcoin. I am now curious if they still feel the same when they learned Elon's Tesla bought $1.5B.

[sana54210]

To put it shortly, they do not know how it really works and they are using opinions of other countries or personalities that are against bitcoin. They are not willing to follow the steps done by Japan and other countries favorable of bitcoin. I am now curious if they still feel the same when they learned Elon's Tesla bought $1.5B.

That is exactly how you can ban bitcoin, they didn't do anything shocking or different than any other place, in fact they did it as better as anyone else I have seen, this is by far the most collective reasoning I have seen from a ban and I do think they worked hard to ban it. Did they do something right? Of course not, they are fully idiots for banning bitcoin, idiots who worked hard but they are still idiots.

It is more about people getting power, Nigeria is not USA, USA could ignore all the crypto people because they have so much money at the top that they could do whatever they want to and can get away with it, but Nigera is a poorer nation, sure there could be super wealthy people there too at the top but the lower you go the less power and money there is to distribute, even to powerful positions, which means crypto could help regular people get richer than people in position, THAT'S the real reason why it is banned.