28 February 2018

Nigeria: Virtual Currencies - CBN Cautions Nigerians

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Lagos — The Central Bank of Nigeria (CBN) has cautioned Nigerians to be wary of investments in crypto currency, stressing that virtual currencies are not legal tender in Nigeria.

The CBN's warning is coming barely one week after the Board of the International Organisation of Securities Commissions (IOSCO), has cautioned against the haste to draw up regulation on the activities of crypto currencies, noting that it will instead confer undue legitimacy which may serve to deceive the general public into believing that there is regulatory faith in the products

The apex bank in a release on Wednesday reiterated that crypto currencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and exchanges such as NairaEx were not licensed or regulated by the CBN.

The statement which was signed by the bank's Acting Director in charge of Corporate Communications, Isaac Okorafor, emphasized that dealers and investors in any kind of crypto currency in Nigeria were not protected by law, thus may be unable to seek legal redress in event of failure of the exchangers or collapse of the business.

The CBN therefore warned Nigerians against investing in crypto currency as doing so would be at their own risk.

It will be recalled that the CBN on January 12, 2017, issued a circular to banks and other financial institutions on virtual currency operations in Nigeria.

In the 2017 circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, the CBN had among other issues noted that virtual currencies were traded in exchange platforms that are unregulated, all over the world.

It further noted that transactions in virtual currencies were largely untraceable and anonymous thereby making them susceptible to abuse by criminals, in money laundering and financing of terrorism.

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