Emerging Markets

Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts

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A large commercial bank in Nigeria has threatened to shut down an undisclosed number of cryptocurrency-related accounts without explanation. Lagos-based Union Bank claims that any decision to do so would be in line with the Central Bank of Nigeria’s (CBN) past warnings about cryptocurrency trading.

Panicky Customers Empty Account Balances

In a statement to account holders this week, Union Bank of Nigeria warned: “In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.” The 100-year-old bank, which has $3.84 billion in assets, cited a series of cautionary statements from the CBN, which apparently do not completely prohibit virtual currency trading, to support its decision.
In January 2017, the central bank released a circular to financial institutions asking them not to use, hold or trade virtual currencies pending “substantive regulation and or (a) decision by the CBN.” A follow-up statement in February 2018 reiterated the same warning, but added “that virtual currencies are not legal tender in Nigeria … we wish to caution all and sundry on the risks inherent in such activities.”

However, Union Bank’s sudden decision to monitor accounts has shaken the west African country’s digital asset industry, the continent’s biggest. Reports have started to emerge of nervous crypto investors already withdrawing their money to avoid the possibility of their accounts being frozen.

Munachi Ogueke, co-founder of Cryset LLC — a Lagos-based over-the-counter bitcoin trading platform — told news.Bitcoin.com that several people within the Nigeria cryptocurrency space had received notifications of possible account closures from Union Bank. “Many are emptying their accounts and closing them down,” Ogueke said.

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