Nigerian Court Freezes $330K Owned by Crypto Users Over Alleged Naira Devaluation

The Federal High Court has approved a request from the Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-corruption agency, to freeze $331,500 (N548.6 million) held in bank accounts linked to suspected cryptocurrency users. These users, associated with platforms like ByBit, KuCoin, and others, are accused of contributing to naira volatility.

BREAKING NEWS: Court Freezes N548.6 Million belonging to 'ByBit, KuCoin' Nigerian crypto users over Naira fluctuation allegations.

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The court’s decision is based on a motion filed on September 3, 2024, which points to cryptocurrency exchanges ByBit and KuCoin as contributors to the naira’s depreciation. The action forms part of a broader initiative by federal authorities to address claims that international cryptocurrency platforms violate foreign exchange laws and evade taxes.

Bybit and KuCoin Accused of Naira Devaluation

Earlier this year, in February 2024, Nigeria’s security agency detained two Binance executives after information from the National Security Advisor implicated them in money laundering and the financing of terrorism. The EFCC has since sued Binance and Tigran Gambaryan for their alleged involvement in $35.4 million worth of money laundering offenses.

In this latest motion, ByBit, KuCoin, and several unidentified cryptocurrency platforms are accused of engaging in “price discovery, confirmation, and market manipulation,” which allegedly triggered distortions in the market and devalued the naira against other currencies through the actions of Nigerian users.

EFCC investigator Okoro Philip, in an affidavit shared with Nairametrics, highlighted Nigeria’s recent success in stabilizing its currency, as seen in the dollar trading at N980 on the black market. However, these improvements were reportedly undone on April 18, 2024, when the dollar surged to N1,250 in black market trading.

Philip claimed that this sudden shift was largely driven by activities on platforms such as ByBit and KuCoin. He identified 22 bank accounts across various Nigerian banks, held by individuals selling USDT, who provided their naira accounts in exchange for USDT’s equivalent. He argued that their actions, such as advertising and exchanging cryptocurrency for naira at damaging rates, have negatively impacted Nigeria’s financial system. The prosecution also accused the cryptocurrency platforms of ignoring Nigeria’s anti-money laundering regulations and enabling users to conduct transactions covertly.

SEC Enhances Crypto Regulations

Meanwhile, the Nigerian SEC has been preparing to intensify its enforcement efforts against cryptocurrency exchanges and users violating its regulations. SEC Director-General Dr. Emomotimi Agama recently reaffirmed the agency’s commitment to protecting investors.

In a related development, the SEC recently granted preliminary licenses to digital asset exchanges Busha and Quidax, allowing them to operate under the Accelerated Regulatory Incubation Program.