The Central Bank of Nigeria has denied publishing a circular that ordered the freezing of crypto accounts on unregistered crypto exchanges and prohibiting regulated banks from dealing with or facilitating payments in cryptocurrencies.

“The Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited,” the alleged circular dated April 23 reads.

The alleged circular stated that the central bank ordered all banks and financial institutions to freeze the accounts of individuals and entities doing business on a specific list of illegal cryptocurrency exchanges, such as Bybit, Kucoin, OKX, and Binance, for 6 months.

Many industry stakeholders raised eyebrows when the central bank initially denied writing the circular but then deleted the denial. However, the central bank later confirmed that the allegations were false.

In February 2021, the Central Bank prohibited banks and financial institutions from engaging in transactions involving crypto assets due to concerns about money laundering and terrorism financing risks. However, the ban was lifted in December 2023, with the government saying global trends had shown a need to regulate such activities.

Despite softening its stance on crypto, in January, the apex bank stated Nigerian banks are still restricted from holding or trading crypto on their own behalf. Since then, the Nigerian government has heavily scrutinized crypto platforms operating in the country. It blocked access to cryptocurrency trading platforms like Binance, Coinbase, and OctaFX.

Binance Nigeria faced special scrutiny after regulators indicted it for allowing $26 billion from unidentified sources pass through Nigeria.

Binance continues to experience difficulties in Nigeria as its U.S.-based executive, Tigran Gambaryan, has been detained in the country on five money laundering charges after discussions with Nigerian officials. Another executive, Nadeem Anjarwalla, fled custody and was located in Kenya, where he is awaiting extradition for his involvement in regulatory issues related to Binance.

Image Source: Bloomberg