Thursday, July 25, 2024

A bank in Nigeria has purportedly imposed restrictions on the accounts of approximately 500 traders dealing in digital assets. These accounts are believed to have been the recipients of a fraction of the more than $10 million illicitly siphoned from Access Bank by cybercriminals during the months of May and June of the current year. A leading figure in Nigerian cryptocurrency advocacy and education has labeled the purported account freezes as a “black mark on the Nigerian banking system.”

Illicit Funds Utilized for Tether Purchases

Social media platforms indicate that Access Bank in Nigeria has allegedly taken actions to restrict the accounts of roughly 500 traders who deal in Tether (USDT). This action was reportedly undertaken following the bank’s acquisition of a legal order, permitting it to place a hold on the financial accounts of these cryptocurrency traders.

The bank contends that the accounts in question were beneficiaries of a portion of the money that had been unlawfully acquired by cybercriminals. As articulated by a social media user on Platform X (previously known as Twitter), Access Bank is estimated to have incurred a loss exceeding $10.4 million, equivalent to 8 billion Nigerian naira, in the span between May and June of this year. This user further inferred that the criminals used a segment of these funds to purchase Tether through traders on the Binance platform.

In a social media update dated October 22, 2023, the accounts of 500 traders were said to be restricted after hackers employed the embezzled 8 billion naira to acquire USDT.

Crypto Advocates Criticize Banking Actions

Rume Ophi, the Executive Secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), characterized the supposed account freezes as a “blot on Nigeria’s banking landscape.” Also known by his moniker, the Cryptopreacher, Ophi argued that such actions by Access Bank and similar entities serve only to further debilitate the cryptocurrency industry in Nigeria.

Harm Exceeds Benefit from Account Freezes

In his written response to inquiries from CryptokenTop.com, Ophi also shared his recommendations regarding the steps that should be taken by Nigerian officials.

“Investigations need to be exhaustive to capture the perpetrators, as opposed to the sweeping freezes of accounts of law-abiding citizens involved in cryptocurrency trading. Such a strategy does not resolve the issue at hand and instead inflicts additional harm,” stated the Cryptopreacher.

Prior reporting by CryptokenTop.com News in August 2021 confirmed that the Central Bank of Nigeria (CBN) had historically mandated banks to disable accounts suspected of enabling crypto transactions.

However, despite a series of account closures affecting crypto businesses in 2021, numerous digital asset traders appear to persist in utilizing traditional banking channels. This has subsequently led to questions concerning the role of banks in executing the CBN’s directive from February 2021.

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What is your perspective on this development? Share your viewpoints in the comment section beneath this article.

Frequently Asked Questions (FAQs) about Access Bank account freeze

What bank in Nigeria has reportedly frozen accounts of cryptocurrency traders?

Access Bank in Nigeria has reportedly frozen the accounts of approximately 500 traders who deal in Tether (USDT).

Why did Access Bank take such an action?

The bank claims that these accounts were recipients of a portion of over $10 million that was stolen from Access Bank by cybercriminals between May and June of the current year.

What legal steps did the bank take before freezing the accounts?

According to reports, Access Bank obtained a court order which allowed it to place a hold or lien on the accounts of these cryptocurrency traders.

Who has criticized the bank’s actions?

Rume Ophi, the Executive Secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), has criticized the action, calling it a “black mark on the Nigerian banking system.”

What is the suggested alternative approach to solving the issue with stolen funds?

Rume Ophi suggests that rather than indiscriminate account freezing, exhaustive investigations are required to capture the actual perpetrators behind the theft.

What has the Central Bank of Nigeria (CBN) done about crypto-related transactions in the past?

In the past, the CBN has mandated banks to disable accounts suspected of enabling crypto transactions. This has led to several account closures affecting crypto businesses in 2021.

Despite previous actions by CBN, do digital asset traders still use traditional banks?

Yes, despite a series of account closures affecting crypto entities in 2021, numerous digital asset traders seem to continue to rely on the traditional banking system.

How has this event affected the cryptocurrency industry in Nigeria?

This action has raised concerns and criticisms, suggesting it further undermines the cryptocurrency industry in Nigeria, causing more harm than solving the underlying issue of cybercrime.

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7 comments

JohnDoe October 25, 2023 - 6:36 am

Wow, this is crazy. can’t believe the bank just froze accounts like that, what about due process?

Reply
LindaO October 25, 2023 - 7:34 am

Rume Ophi has a point, this kind of action will only harm innocent ppl and do nothing to catch the real criminals. Investigation should be the first step.

Reply
CryptoExpert33 October 25, 2023 - 1:39 pm

If these traders are innocent, it’s a massive overreach by the bank. Ruins trust and makes ppl think twice about using traditional banks for crypto.

Reply
NaijaGuy October 25, 2023 - 3:11 pm

Seriously, whats going on with our banking system. first CBN now this. do they want to kill crypto in Nigeria?

Reply
Investor101 October 25, 2023 - 5:39 pm

Interesting piece. Raises valid concerns about the balance between regulation and freedom in the financial sector.

Reply
FinancialAnalyst October 25, 2023 - 9:44 pm

Important to note that if the bank obtained a court order, they’re acting within legal parameters. Still, it raises ethical questions.

Reply
TechNerd October 26, 2023 - 12:51 am

This is why decentralized finance is the future. No banks to shut u down arbitrarily.

Reply

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