Nigerian Crypto Investors Experience Bank Account Freezing

    The Central Bank of Nigeria (CBN) has flagged the bank accounts of Nigerian crypto investors using peer-to-peer (P2P) services. The CBN’s decision is believed to be related to the recent hack of Flutterwave, which led to almost $6.5 million (3 billion nairas) being illegally transferred from the accounts of the Nigerian fintech company.

    On February 27th, a motion ex-parte was filed and granted in support of Flutterwave’s claims, resulting in 107 accounts being put on lien/Post-No-Debit (PND), including their fifth beneficiaries. While the bank accounts have yet to be proven affiliated with the hack, some locals have confirmed that their accounts have been frozen in connection to the incident.

    The situation has discouraged P2P users from using over-the-counter (OTC) markets, which allow trading of securities between two counterparties executed outside of formal exchanges and without the supervision of an exchange regulator. The hacked sum flowed into the Nigeria crypto market on different OTCs, and users now have problems with financial intermediaries when they want to use P2P services for crypto transfers.

    This move by the CBN has caused some Nigerian crypto investors to worry about the safety of their funds, with some of them resorting to moving their assets to offshore accounts. The action of the CBN could also dampen the growth of the Nigerian crypto industry, which has been thriving in recent times.

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