Federal High Court has ordered that the bank accounts of suspected cryptocurrency users on ByBit, KuCoin, and other platforms have N548.6 million frozen by the Economic and Financial Crimes Commission (EFCC), because of their alleged involvement in naira fluctuations.
The court froze the cash based on September 3, 2024, request that accused two prominent foreign cryptocurrency sites, ByBit and KuCoin, of contributing to the depreciation of the Nigerian Naira, according to Nairametrics.
This development is part of a larger legal and prosecutorial effort by federal government authorities to deal with claims that international cryptocurrency platforms are evading taxes and violating foreign exchange laws.
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Remember that in February 2024, two executives of the cryptocurrency platform Binance were detained by Nigeria’s security agency on the basis of information provided by the National Security Adviser.
The information claimed to have involved money laundering and financing of terrorism on specific cryptocurrency exchange platforms.
According to Nairametrics, the EFCC has already filed a lawsuit against Binance and Tigran Gambaryan for $35.4 million worth of money laundering offenses.
ByBit, KuCoin, and several other anonymous cryptocurrency platforms are accused in this most recent motion of facilitating the “price discovery, confirmation, and market manipulation” that led to “distortions in the market, resulting in the naira losing its value against other currencies” by their Nigerian users.
In his affidavit, which Nairametrics exclusively obtained, Okoro Philip, EFCC investigator, claimed that Nigeria has made significant progress in recent months towards currency stabilization measures by the Federal Government, as demonstrated by the dollar’s trade on the illicit market at N980 to $1.
He continued by saying that these gains were quickly undone on Thursday, April 18, 2024, when the dollar quickly rose on the black market from N1,250 to $1.
“These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms,” he stated, citing more intelligence and research.
According to him, the 22 bank accounts listed in the motion and located in different Nigerian banks are owned by eager sellers of USDT who give their naira accounts in exchange for the transfer of the USDT’s naira equivalent.
The argued that the people whose accounts were found 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 levied charges against the cryptocurrency platforms, alleging that they wilfully disregarded Nigeria’s anti-money laundering rules and regulations, allowing their users to conduct business secretly.
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“ByBit is a cryptocurrency platform that allows users to swap USDT (a digital dollar) for other currencies such as the naira. One USDT is approximately equal to one US dollar. The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value.”
In the case identified as FHC/ABJ/CS/543/2024, the official stated, “The proceeds of this manipulation go into the account of the willing seller.”
