CBN was right about banning or limiting the activities of cryptocurrency in Nigeria.
The central bank of Nigeria (CBN) on Friday 5th prohibited banks and financial institution from dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges with immediate effect.
The move which has caused serious outrage across social media with people accusing the government of trying to frustrate the youths, but in reality, the apex bank is doing what they think is best for the nation.
More facts have emerged on why the Central Bank of Nigeria (CBN) decided to ban cryptocurrency trading in the country.
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There are three major reasons why the CBN banned cryptocurrency in Nigeria, they are as follows;
Yahoo Boys
According to Investigations, one of the main reasons behind the ban is because of the fraudulent activities of popular internet fraudsters alias Yahoo Boys.
The federal government and the CBN were warned by the United States’ Federal Bureau of Investigation, (FBI), on the activities of fraudsters using cryptocurrencies to bringing into the country hundreds of millions of US Dollars illegally obtained from the USA and other Western economies.
This was said to have particularly targeted COVID-19 stimulus packages designed to cushion the impact of lockdown measures on businesses and working families in these countries.
In an interview at a Reuters online event last week Wednesday, President of the European Central Bank, Christine Lagarde said of bitcoin: “It’s a highly speculative asset that has led to some reprehensible activity, including money laundering, and any loopholes need to be closed.
“There has to be regulation. This has to be applied and agreed upon at a global level because if there is an escape that escape will be used; she said.
According to the investigations, “FBI had discovered that fraudulent Nigerians, popularly known as yahoo boys, took control of large chunks of money released as stimulus in the wake of the devastating effects of the COVID-19, which has put many Americans out of jobs.”
In order to avoid detection, these fraudsters had been sending millions of dollars to Nigeria through cryptocurrencies. This made it difficult for the authorities in both Nigeria and the US to trace the illicit monies.
However, before these funds were used to destabilise the Nigerian economy, the CBN had to wield the big stick.
In the last six months, Nigeria is said to have become the second country in the world with the biggest cryptocurrency transactions.
According to highly placed sources within the presidency, “These fraudsters remitted between $200 and $300 million to Nigeria every week, using cryptocurrencies.
“The Central Bank and the federal government were clearly alarmed by this development and had to act fast before irreparable damage is done to the economy.”
2. Greedy Politicians
Just like Yahoo Boys, Nigerian politicians are now using cryptocurrency to launder stolen money out of the country.
Instead of using the money allocated to them for public purposes, they will divert the money and convert it to cryptocurrency, because they knew that they the money will be very difficult to trace.
3. Kidnappers
The more disturbing part of the Investigations about cryptocurrency trading in Nigeria was that intelligence reports which indicated that kidnappers had switched to bitcoin for ransom payments, making it increasingly difficult to trace.
To make matters worse, investigations by FBI showed Nigeria did not have the underlining economic base to justify the massive flow of funds on a weekly basis. To compound the issue, was how the inflows were being routed leaving investigators puzzled and perplexed by the elaborated complicated channels in the digital money world of anonymity.
After the FBI tip-off that these funds being pumped into cryptocurrencies were products of fraud, the federal government, acting through the CBN, had to ban cryptocurrencies in Nigeria.
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