The Federal Government of Nigeria has filed a criminal lawsuit against four local cryptocurrency traders for conducting business without a valid banking license.
The traders—Ejiogu A. Chinedu, Nnamdi F. Okereke, Oty Ugochukwu Stanley, and Chukwuebuka F. Ogumba—are accused of engaging in transactions involving the stablecoin Tether (USDT) and the Nigerian Naira.
The lawsuit was filed in Abuja, Nigeria’s capital, amid ongoing scrutiny of the cryptocurrency market.
The government claims these traders violated the Banks and Other Financial Institutions Act of 2020 by operating as financial institutions without proper authorization.
This action highlights the growing tension between cryptocurrency activities and government regulations in Nigeria.
This lawsuit follows an investigation by the Economic and Financial Crimes Commission (EFCC) into alleged manipulation of the Naira’s value through various bank accounts associated with digital assets exchanges.
The EFCC took measures to freeze numerous accounts believed to be involved in these activities.
On April 24, the court granted an interim order to freeze over 1,000 accounts, which held approximately N548.6 million, or about $330,000.
Despite a temporary lifting of some freezing orders, the EFCC later secured another court order on September 4 to freeze the accounts again until their investigation is complete.
The Nigerian government contends that the traders conducted their business activities without being authorized dealers in Nigeria’s Autonomous Foreign Exchange Market (AFEM).
This allegedly involved negotiating USDT to Naira rates without legal permission, violating Section 29(1)(c) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.
The government claims that the traders’ unauthorized activities date back to 2021 and continued until January 2024.
Legal representatives for both sides are currently making their cases in court. The duration of this case remains uncertain, but it is expected to take considerable time before a final decision is reached.
This lawsuit could have far-reaching consequences for peer-to-peer (P2P) over-the-counter (OTC) cryptocurrency services in Nigeria.
If the defendants are found guilty, it may set a precedent that requires such services to have a banking license for trading USDT and Naira.
Such a ruling could further complicate the operating environment for digital asset businesses in Nigeria, a country that ranks among the top adopters of Bitcoin and USDT, according to Chainalysis data.
These recent developments reflect the Nigerian government’s struggle to balance regulatory oversight with the growing interest in digital assets.
While trying to defend the Naira against its depreciation and protect consumers, the government also faces pressure to foster an enabling environment for cryptocurrency businesses.
The distinction between Bitcoin and other cryptocurrencies remains a contentious issue.
Without clear regulations, more lawsuits like this one may arise as the government seeks to maintain control over financial activities in the country.
