A crypto trading company, CBI Exchange Namibia seeks the help of the High Court to force the Bank of Namibia to release its funds after the bank froze its business account for conducting unauthorised banking services.
CBI Exchange Namibia, formerly known as Gazania Investment Four Hundred and Sixteen Limited, is claiming that the move by the Bank of Namibia to freeze its account held at Bank Windhoek is unlawful and an abuse of power by Namibia's central bank. The account in question holds N$10 million.
The company's director, Coenraad Botha in his affidavit claims that the company was never afforded the opportunity to be heard before the bank froze the account - leaving the company unable to pay for its day-to-day expenses.
It is his assertion that BoN froze the company's account based on the assessment it had made on the parent company, CBI Exchange SA (Pty) Ltd which is a South African registered company.
CBI Exchange SA was formerly known as Uhuru Tribe which once operated a stokvel. The stokvel was dissolved in 2018. The company's core business was the selling and buying of cryptocurrencies.
According to Botha, CBI Exchange Namibia was registered in June 2021 with the Business and Intellectual Property Authority (Bipa) as a company dealing with cryptocurrencies. So, the assessment for the company could not have been carried out prior to June 2021. The company is profitable as to date it has paid an average of N$30 million to its Namibian members. He said BoN had all the information but decided to move ahead with freezing the account.
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"The applicant does not take deposits from the public. Its business, essentially relates to the selling and buying of crypto-based (virtual) assets," said Botha.
He said the country's laws allow individuals to operate businesses of their choice and there is no law in Namibia prohibiting virtual asset businesses.
According to the letter from BoN dated 4 March 2022 directed to Bank Windhoek, the central bank requested the freezing of Botha's account and that of the company. According to the letter, BoN investigated the dealings of CBI, formerly known as Uhuru Tribe, and found that the company was in violation of section five of the Banking Institution Act.
The particular Act deals with the prohibition of conducting banking business by unauthorised persons which includes receiving, accepting, and taking deposits from members of the public and pretending to be a bank. BoN has since indicated its intention to oppose the application. The matter which was before Judge Essi Schimming-Chase yesterday was postponed to 19 June for case management. -mamakali@nepc.com.na
