The Central Bank of Nigeria’s decision to ban cryptocurrency exchange in Nigeria left Nigerians, especially the youths, in the cold.
However, facts have emerged on why the Central Bank of Nigeria (CBN) decided to ban cryptocurrency trading in the country.
It will be recalled that the apex bank stopped dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges last week Friday.
According to reports, Investigations have revealed that, the federal government and the CBN were warned by the United States’ Federal Bureau of Investigation, (FBI), on the activities of fraudsters using cryptocurrencies to bringing into the country hundreds of millions of US Dollars illegally obtained from the USA and other Western economies.
This was said to have particularly targeted COVID-19 stimulus packages designed to cushion the impact of lockdown measures on businesses and working families in these countries.
In an interview at a Reuters online event last week Wednesday, President of the European Central Bank, Christine Lagarde said of bitcoin that it’s a highly speculative asset that has led to some reprehensible activity, including money laundering, and any loopholes need to be closed.
She called for a regulation to be applied and agreed upon at a global level because if there is an escape that escape will be used .
According to a source, FBI had discovered that fraudulent Nigerians, popularly known as yahoo boys, took control of large chunks of money released as stimulus in the wake of the devastating effects of the COVID-19, which has put many Americans out of jobs.
In order to avoid detection, these fraudsters had been sending millions of dollars to Nigeria through cryptocurrencies which made it difficult for the authorities in both Nigeria and the US to trace the illicit monies.
In the last six months, Nigeria is said to have become the second country in the world with the biggest cryptocurrency transactions.
According to highly placed sources within the presidency, These fraudsters remitted between $200 and $300 million to Nigeria every week, using cryptocurrencies.
The Central Bank and the federal government were clearly alarmed by this development and had to act fast before irreparable damage is done to the economy.” Even more disturbing was that intelligence reports indicated that kidnappers had switched to bitcoin for ransom payments, making it increasingly difficult to trace.
Also according to reports, investigations by FBI showed Nigeria did not have the underlining economic base to justify the massive flow of funds on a weekly basis. To compound the issue, was how the inflows were being routed leaving investigators puzzled and perplexed by the elaborated complicated channels in the digital money world of anonymity.
A cryptocurrency (or crypto) is a digital unregulated currency that could be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.
Much of the interest in the currency, not backed by any government, is to trade for profit, with speculators at times driving prices skyward.
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