The cryptocurrency traders have commenced offline operations outside approved exchange platforms following the Central Bank of Nigeria (CBN) directive that banks should close their accounts.
The founder and lead, Cryptopreacher Blockchain Academy, Rume Ophi, said commercial banks had notified cryptocurrency traders about the CBN’s directive and subsequent account closure.
The CBN had on Friday, directed Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Non-Bank Financial Institutions (NBFIs) local financial institutions to close accounts belonging to crypto currency operators.
He said with the accounts closed, the traders were trading outside the exchange platforms because they could no longer make payments through channels connected to the financial system.
“The banks are already sending us messages that they will no longer process Bitcoin payments. I have funds in my platform, and I do not intend changing it to naira anytime soon because of what is happening. I will leave the funds for a very long time. I know that from now to the next 10 years, the naira will continue to depreciate. It happened in Kenya, and that same plan was adopted and its working,” he said.
Ophi said the cryptocurrency traders in January met with Securities and Exchange Commission (SEC) on how to regulate their operations, only to be hit by the CBN clampdown.
“I think the government is not seeing reality in the world of today. This is technology, and you cannot fight technology. Agreed that technology has its bad side, they are supposed to be advised appropriately. SEC recognises cryptocurrency as a financial instrument. I was part of the committee that met SEC about a month ago, to look at how regulations can be brought in. Little did we know that the CBN will come and clampdown on us,” he said.
He said the steps taken by CBN would make it difficult for crypto investors to come to Nigeria, and foreign investors would no longer be putting Crypto Exchange Platform in the country. Also, those that already have exchange platform in Nigeria would be affected.
“We cannot process withdrawal and deposit using our platforms anymore, or through third party platform like Paystack or Flutterwave. But transactions will still go on, though it will be offline. This is not going to be easy for new entrants into the business, and new people may not come in,” she stated.
Continuing, Ophi said: “One of my customers just requested for $400, he will send me the naira equivalent of $400 and I will send him the Bitcoin. But previously, the transactions will pass through the trading platform and payment made through the banks.
“Also, before now, the customer would simply load his card with naira and pay through the platform. The transactions will now be happening outside the trading platforms, that’s how it was before the platform came into the country. The payment platform gives leverage to a lot of young people. New entrants believe their money is safe when they use the bank to process payment, but that is no longer happening after the CBN clampdown”.
Meanwhile, one of the largest cryptocurrency exchanges by market volume, Binance has removed naira from its trading pairs.
In a statement posted on its website, Binance advised users to transfer their peer-topper wallet for transactions.
“Binance will remove and cease trading on the following trading pairs at 2021-02-09 12:00 PM (UTC): BNB/NGN, BUSD/NGN, DOT/NGN, ETH/NGN, LINK/NGN, LTC/NGN, TRX/NGN, XRP/NGN.
Continuing, it said NGN is fiat currency and does not represent any other digital currencies, adding that cryptocurrency trading is subject to high market risk.
“Please make your trades cautiously. Binance will make best efforts to choose high-quality coins, but will not be responsible for your trading losses,” it advised traders.