CBN’s Crypto Ban: Binance, Quidax, Buycoins Africa, Bundle halt transaction

Top trader of the world’s biggest crypto exchange, Changpeng Zhao has disclosed that Binance was complying with Nigeria’s Apex bank directive and has disabled deposits to prevent more NGN from coming in.

What is cryptocurrency?

A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.

The highly revered crypto leader updated its clientele base by notifying them via Twitter it received notice from channel partners that NGN deposits and withdrawals will be affected.

What this means: Changpeng Zhao anticipates that the Nigerian banks will stop working with Crypto exchanges in line with the Nigerian Apex bank directive, meaning P2P trading will likely flourish as a result.

• He further advised Nigerian customers to withdraw their local denominated deposits as early as possible to avoid potential channel issues.

That being said, many Crypto pundits are of the opinion that although the Central Bank’s recent directive does not criminalize ownership of crypto, the circular will however make it difficult for them to process debit, credit card, and bank transfer transactions.

It is also interesting to note that most fintech startups like Paystack, Flutterwave, Korapay, usually partner with Deposit Money Banks, Non-Financial Institutions, other financial institutions  to transact with Nigerian bank customers.

Also, Nigeria’s fast-growing crypto exchange, Quidax  issued a press release on the CBN’s new instructions regarding crypto payments,

“We have seen CBN’s new policy but don’t worry your funds are safe and trading continues as usual. However, all Naira deposits have been temporarily paused as CBN’s policy affects our payment partners.
Thank you for your support,” Quidax also affirmed.

In addition, a Nigerian-based crypto exchange, Buycoins Africa has assured its clients via its Twitter handle, disclosing their funds were in good hands thus further assuring the public that the fintech company would ensure its services were compliant.

“Thanks to everyone who has reached out. We are fully aware of the newest CBN circular and are going to be working with regulators to ensure our services are compliant. All trading on our platforms continues as usual, and all user funds are safe,” BuyCoins tweeted.

Furthermore, Bundle, a social payments app that offers crypto support, also disclosed that it was fully aware of the newly issued CBN directive and stated that customers’ funds remained safe as usual.

Here is an excerpt of Bundle Africa’s statement as regards the Nigerian apex bank’s directive recently issued;

“We’re aware of the notice on cryptocurrency-related Naira payments shared by the CBN today.

“Trading has not stopped and your assets remain as safe as ever. We are monitoring the situation closely and we’ll share updates as we have them. Thank you for your support!.”

The Central Bank of Nigeria had recently notified Deposit Money Banks, Non-Financial Institutions, other financial institutions against doing business in Crypto and other digital assets.

In a circular dated 5th February 2021 and distributed to regulated financial firms, the apex bank of Africa’s largest economy warned and reminded local financial institutions against having any transactions in crypto or facilitating payments for crypto exchanges.

• The apex bank instructed the financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges.
• Also, the CBN further warned Nigerian financial stakeholders that any breach of this directive will attract serious regulatory sanctions.

According to the Central Reserve Bank, as the monetary authority, regulator of the financial system, and watchdog of payment systems, there is currently no legal or regulatory framework applicable to cryptocurrencies or their equivalents