Crypto Investment Warning Issued By The Central Bank of Nigeria

News, Regulation | March 2, 2018 By:

The Central Bank of Nigeria (CBN) has again cautioned residents and financial institutions against cryptocurrency investments.

In a circular dated February 28, the CBN warned Nigerians that cryptocurrency investments are unprotected, and investors face risks such as market volatility and exchange bankruptcy.

“The Bank wishes to reiterate that cryptocurrencies such as bitcoin, Ripple, Monero, Litecoin, Dogecoin, Onecoin, etc and exchanges such as NairaEx are not licensed or regulated by the CBN,” the central bank said. “For the avoidance of doubt, dealers and investors in any kind of cryptocurrency in Nigeria are not protected by law. Virtual currencies are traded in exchange platforms that are unregulated all over the world. Consumers may therefore lose their money without any legal redress in the event these exchanges collapse or close business.”

In December 2016, the central bank and the Nigeria Deposit Insurance Corporation (NDIC) established a committee to study bitcoin. The following month it issued a circular informing all Nigerian banks that all transaction in bitcoin and other digital currencies have been banned in Nigeria. The circular stated that the move was necessitated by money laundering and terrorism financing risks inherent in operations of digital currencies.

In a recent statement, Umaru Ibrahim, director of research, policy and international relations (RPIR) at the NDIC, said cryptocurrencies do not belong to the category of currency or coins issued by the CBN, therefore, they are not insured by the NDIC.