- The alleged crypto users had wallets on Bybit, KuCoin and others
- The Nigerian government had accused crypto exchanges of aiding the devaluation of the country’s currency by allowing users to arbitrarily fix the USDT-NGN exchange rates using peer-to-peer platforms
- 22 Nigerian bank accounts listed in the motion are owned by willing sellers of USDT
Through its anti-graft agency, the Economic and Financial Crimes Commission (EFCC), the Nigerian government has frozen N548.6 million in bank accounts belonging to alleged Nigerian cryptocurrency users. The EFCC got an order to freeze the accounts from a Federal High Court in Abuja.
The alleged crypto users had wallets on Bybit, KuCoin and others. The motion with which the EFCC got the court order was dated September 3, 2024 and alleged that the crypto users played roles in naira fluctuations and the devaluation of the country’s currency.
The Nigerian government had accused crypto exchanges of aiding the devaluation of the country’s currency by allowing users to arbitrarily fix the USDT-NGN exchange rates using peer-to-peer platforms. While it had cracked down on Binance—and the exchange had to delist all naira pairs on its platform and shut its peer-to-peer service—by arresting its executives and charging them, it had not really shined its light on both Bybit and KuCoin.
This development has now extended the indictment, according to the case marked FHC/ABJ/CS/543/2024, to Bybit, KuCoin, and other unnamed foreign crypto exchanges for allowing their Nigerian users to use their platform for ”price discovery, confirmation, and market manipulation,” which caused “distortions in the market, resulting in the naira losing its value against other currencies.”
Nairametrics quoted the affidavit of Okoro Philip, an EFCC investigator, as stating that the Nigerian government made significant progress in stabilising the country's currency in recent months, stating that early this year, the currency was stable on the black market at N980 to $1. But on Thursday, April 18, 2024, the dollar surged from N1,250 to $1 on the parallel market.
He blamed the surge on users' activities on the ByBit and KuCoin platforms. “These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms.”
According to him, the 22 Nigerian bank accounts listed in the motion are owned by willing sellers of USDT who give their naira accounts in exchange for the transfer of the USDT's naira equivalent.
He argued that the people whose accounts were found in the motion are users of ByBit, KuCoin, and other international cryptocurrency platforms. These people are not allowed to trade in foreign currencies, advertise, bargain, or exchange cryptocurrency for naira at rates that are harmful to Nigeria's financial system.
The prosecution contended that the cryptocurrency platforms intentionally disregarded the mandated obligations under Nigeria's anti-money laundering statutes and guidelines, thereby permitting their users to conduct their business in secret.
“ByBit is a cryptocurrency platform where the exchange of USDT (a digital dollar) to other currencies, including the naira, takes place. One USDT is approximately equivalent to one United States dollar (USD). The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value,” the motion stated. “The proceeds of this manipulation go into the account of the willing seller.”
After exiting Nigeria, OKX delists several popular spot trading pairs
Meanwhile, TheRadar earlier reported that Popular crypto exchange OKX has announced the delisting of several popular spot trading pairs. This came just days after the exchange's exit from Africa’s largest crypto market, Nigeria.
The delisting will be gradual in four batches from July 25 to August 2. In a statement on its website, the exchange advised users to cancel orders pertaining to the affected trading pairs before the delisting date. The system will automatically cancel these orders if the users fail to cancel the orders themselves, the exchange warned.
