Sunday, 22 July 2018

CBN Bans Banks from Dealing in Virtual Currencies and Bitcoins

The Central Bank of Nigeria, CBN has banned banks from all transactions in virtual currencies.

The ban was issued Tuesday by the director of the department of financial policy and regulation, CBN, Kelvin Amugo, who said that this was necessitated by the inherent money laundering and terrorist financing risks to virtual currency transactions.

In a circular to banks and other financial institutions on virtual currency trading in Nigeria, Amogu said: "The emergence of virtual currencies (VCs) has attracted investment in payment infrastructure that provides new ways of transmitting money. value on the Internet.

Exchange platforms

Virtual currencies

"CV transactions are largely untraceable and anonymous, making them vulnerable to criminal abuse, especially in money laundering and terrorist financing." VCs are traded on trading platforms Unregulated, all over the world, consumers can lose their money without any legal recourse in the event of collapse or closure of a market.

"The development of VC payment products and services (VCPPS) and their interactions with other new payment products and services (NPPS) require guidelines to protect the integrity of the Nigerian financial system. address the risks associated with money laundering and terrorist financing associated with VC and other types of institutions that function as nodes, where convertible CR activities cut across the regulated financial system.

"The attention of banks and other reporting financial institutions is drawn to the above risks and you are required to take the following steps pending the regulation or substantive decision of the NCB;

"Make sure you do not use, store and / or perform transactions in any way in any virtual currency;

"Ensure that existing customers, who are virtual currency exchangers, have effective AML / CFT controls that enable them to comply with the requirements of identifying, verifying and monitoring customer transactions;

"When banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchangers / customers, the relationship should be stopped immediately, and any suspicious transactions from these customers should be reported immediately to the cell. Nigerian Financial Intelligence Unit (NFIU). "

The apex bank reiterated that VCs such as Bitcoin, Ripples, Monero, Litecoin, Dogecion, Onecoin, etc. and similar products are not legal offers in Nigeria, so any bank or institution that transacts in these matters does so at its own risk.

The ban on CBN comes a week after the Securities and Exchange Commission (SEC) issued a warning against virtual currencies.

The Commission said in a statement last week that "the public is urged to be extremely cautious about digital (cryptocurrencies) as an investment vehicle. individuals, companies or entities that promote them have not been authorized, nor any guidelines / regulations developed for them by regulatory authorities in Nigeria, no protection is offered to users or investors in these virtual currencies. if virtual currencies fail or if the companies that promote them go bankrupt. "

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