In recent updates, rumors circulate about a purported circular supposedly issued by the Central Bank of Nigeria (CBN). The alleged content of this document cautioned financial entities against engaging with cryptocurrencies and supporting activities for crypto exchanges. This information surfaced following Nigeria's lifted ban from four months back, which initially barred banks and financial institutions from managing accounts for virtual asset service providers (VASPs).

The news sparked concerns and debates within the financial sector as reports surfaced about a supposed crackdown by the CBN on institutions enabling crypto transactions in Nigeria. The purported circular specifically warned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs), and the general public about potential risks linked with crypto dealings.

This document urged regulated institutions to desist from cryptocurrency dealings and assisting exchanges, referencing previous regulatory instructions on the matter. However, it's essential to note that the ban was lifted in December 2023, followed by stringent guidelines permitting banks and other entities to partake in cryptocurrency activities under specific regulations.

The alleged circular further directed the mentioned institutions to identify and report individuals and entities found transacting or operating cryptocurrencies on various platforms. Notably, platforms like Binance, OKX, KuCoin, and Bybit were listed as prohibited, alongside others involved in trading the Nigerian Naira in Peer-to-Peer (P2P) Markets. Such unlicensed platforms were stated to be under scrutiny by the CBN and the Economic and Financial Crimes Commission (EFCC). Financial entities were instructed to suspend accounts associated with cryptocurrency dealings for six months if identified.

Moreover, the CBN emphasized potential repercussions, including severe regulatory penalties for any parties contravening the directives. Despite these stern warnings, the Central Bank of Nigeria clarified thereafter that the alleged circular was spurious, branding it as fake content that did not originate from the institution itself.

Notwithstanding the debunked circular, the EFCC recently took action by freezing over 300 illicit forex accounts tied to a P2P trading platform. Chair of the EFCC, Ola Olukoyede, disclosed that these accounts were suspended in adherence to a court order, revealing a concerning financial scheme that surpassed the infractions of major platforms like Binance within the national bounds.

It was highlighted that these measures were put in place to safeguard the integrity of the foreign exchange market while taking steps to shield the economy from potential risks posed by unsanctioned financial activities. The EFCC expressed concern over the sizable flow of funds passing through unregulated corridors, underlining the necessity for such interventions to maintain financial stability and curb illicit practices.