INVESTIGATION: Why CBN banned cryptocurrency

More facts have emerged on why the Central Bank of Nigeria (CBN) decided to ban cryptocurrency trading in the country.

The apex bank prohibited dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges last week Friday.

Investigations by THISDAY have revealed that, 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 bring 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.

According to THISDAY investigation, “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.”

Even more disturbing was that intelligence reports indicated that kidnappers had switched to bitcoin for ransom payments, making it increasingly difficult to trace.

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