Turmoil in Nigeria's Crypto Market Amid Fake CBN Circular

Amid a recent government crackdown on Binance and other major international crypto exchanges, Nigeria's crypto market has been a hotbed of uncertainty.

Against this background of uncertainty, a recent circular purporting to emanate from the Central Bank of Nigeria (CBN), the country's apex bank, threatened to throw the space into full-on despair.

One of the crypto news outlets that reported the "fake" circular, Decrypt, said the bank directed banks and all other financial institutions to seek out and freeze accounts of users transacting "USDT illegally" on popular exchanges such as Bybit, Kucoin, OKX, and Binance. The listed exchanges had not obtained licenses in Nigeria.

Perhaps not surprisingly, the reports and circular had sparked significant angst amongst members of the crypto community, who were afraid that the bank was going to, once more, effectively outlaw crypto transactions. Such fears were not allayed by the chaotic reaction of the CBN. What was inexplicable was that the apex bank had seen it fit to delete the first post denying the authenticity of the circular, stoking further uncertainty in the minds of onlookers.

For many, it stirred not-so-distant past memories while taking the stakes a notch higher.

In February 2021, the CBN equally issued a circular barring banks from facilitating crypto transactions. As of December 2023, the apex bank of Nigeria had relaxed this embargo, indicating the continuous rise of the nascent market that regulation would now best guide instead of imposing a blanket ban.

The newest fake circular is quite the same as the ones issued by CBN this year, with a very key difference: it tells that those merchants whose names appear under these exchanges will be arrested.

DailyCoin has reached out to Nigeria's apex bank for comments, but at the time of this press, no response had been given regarding the source of the fake circular and what could be causing the CBN to respond in a stymied fashion.

Soaring inflation and rapid devaluation of the naira have witnessed several young Nigerians finding a haven in cryptocurrencies, particularly stablecoins like USDT, to preserve their value. The recent crackdown on crypto exchanges has filled many a heart with dread, while the recently denied CBN circular was threatening to deepen those concerns further and roll back progress made at the end of 2023.