The Federal High Court in Abuja has lifted the freezing order on six bank accounts previously indicted by the Economic and Financial Crimes Commission (EFCC) for conducting cryptocurrency exchanges between naira and other currencies at rates detrimental to Nigeria’s financial system.
On Monday, Justice Emeka Nwite lifted the preservatory order on the following accounts: Awe Microfinance Bank (N2,367,624.45), Olalekan Sibiku Adesugba (N3,375,435.41), Ad Ishola Farms (N10,104,482.91), H. Ishola Multibiz Int’l (N16,505,822.74), Microtech Investment Services (N3,545,660.73), and HML Business Ventures (N53,585,649.77).
This decision came after the EFCC filed an affidavit on November 25, 2024, stating that its investigation revealed the funds in these accounts, totaling N89,484,694.01, were not linked to any unlawful activities.
It was reported that the EFCC, on September 4, 2024, secured an order freezing N548.6 million in bank accounts belonging to suspected crypto users on platforms such as ByBit, KuCoin, and others, based on their alleged role in fluctuations of the naira.
The motion, dated September 3, 2024, which the court relied on to freeze the funds, focused legal attention on major foreign crypto platforms ByBit and KuCoin, accusing them of contributing to the devaluation of the Nigerian currency.
An EFCC investigator, Okoro Philip, stated in his affidavit, exclusively seen by Nairametrics at the time, that in the months before April 18, 2024, Nigeria experienced significant currency stabilization, with the dollar trading at N980 to $1 on the black market. However, on April 18, 2024, the dollar surged from N1,250 to $1 in the parallel market.
He alleged that further investigation and intelligence indicated that “these fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms.”
Philip also noted that 22 bank accounts, domiciled in various Nigerian banks and mentioned in the motion, belonged to individuals selling USDT, who provided their naira accounts to transfer the naira equivalent of the USDT.
The prosecution also accused the cryptocurrency platforms of deliberately ignoring Nigeria’s anti-money laundering laws and regulations, allowing users to operate under a veil of secrecy.
EFCC counsel, Ekele Iheanacho SAN, had urged the court to freeze the bank accounts listed in the motion, which belonged to individuals being prosecuted or investigated for unauthorized foreign exchange dealings, money laundering, and terrorism financing, pending the conclusion of the investigation and prosecution.
The motion was filed in open court on September 4, 2024, and granted by Justice Emeka Nwite.
About a month after the initial order, Iheanacho filed an affidavit to discharge the freezing orders on some of the 22 accounts.
In an affidavit of facts related to the investigation, deposed by EFCC operative Charles Anele and exclusively seen by Nairametrics, he explained that the EFCC had conducted various investigative activities on the accounts under the freezing order.
This development follows a previous court order freezing 1,146 accounts for 90 days (from April 25, 2024, to July 23, 2024) due to illegal financial transactions.
An affected party later applied to have several of the freezing orders lifted, and the court granted the request.
However, the EFCC filed a new motion to continue its investigation, having pressed criminal charges against some of the account operators.
It was learnt that the EFCC and Federal Inland Revenue Service (FIRS) are already in court against Binance over tax evasion and money laundering offenses involving $35.4 million.
The EFCC’s motion later extended its indictment to ByBit and KuCoin, accusing them and several unnamed crypto platforms of enabling Nigerian users to engage in “price discovery, confirmation, and market manipulation” through their platforms, causing “distortions in the market, resulting in the naira losing its value against other currencies.”
ByBit remains one of the few cryptocurrency exchanges still offering a peer-to-peer section on its platform, following a crackdown on other exchanges like Binance, which led to the delisting of their peer-to-peer categories.
ByBit also offers options for crypto trading on its platform and remains a favorite among Nigerian crypto traders. Nigeria’s National Security Adviser (NSA) has classified crypto trading as a national security issue.
This led to the Central Bank of Nigeria (CBN) ordering five fintech companies—OPay, Palmpay, Moniepoint, Kuda, and Paga—to stop onboarding new customers.
In response, these fintech companies later announced the prohibition of cryptocurrency or virtual currency transactions on their platforms.
Under CBN supervision, the fintech companies are now required to report any account trading in cryptocurrency to the NSA through their regulator, the CBN.
KuCoin’s VAT charge comes amid the Nigerian government’s clampdown on cryptocurrency exchanges and related transactions, which led to Binance exiting the market.
This crackdown also forced Binance and KuCoin to halt NGN/USD P2P trading on their platforms.
