‘Is it brilliant?’ Finance lawyers discuss on bank account closures over crypto trading in Nigeria

At about 12: 35am on Tuesday, one of my colleagues acquired an email from Ecobank. 

It began with a couple of paragraphs reminding him of the Central Bank of Nigeria’s directive that banks need to terminate enabling cryptocurrency transactions. The an fundamental message used to be this:

“…please be told that any account identified as transacting or working in cryptocurrency exchanges inner our plan will be closed accordingly. We therefore query that you just kindly exhaust your account neatly and for simplest accredited transactions.”

The email reads adore a warning, informing potentialities of what is occurring to occur if they replace in cryptocurrencies henceforth.

That interpretation might maybe almost definitely be varied from what we have seen from a couple of banks, notably so-called Tier 1 commercial banks. 

We reported ongoing account closures by Acquire admission to Bank and Guaranty Belief Bank, where affected potentialities deliver they despatched or acquired money for cryptocurrencies thru their bank accounts sooner than February 5.  Now we haven’t acquired a response from Ecobank on whether they’ve suspended buyer accounts that traded cryptocurrencies sooner than the CBN despatched its spherical on the 5th of February.

Given the frightful inequity in interpretation, it’s serious to quiz what precisely the CBN is directing banks to enact. 

So we despatched a design of inquiries to 6 Nigerian regulations firms whose companions are familiar with banking and finance regulations in Nigeria. Four answered to us. We’ve classified their responses in line with the questions we despatched and produced their responses as acquired, with some edits for clarity and brevity.

  1. Is the CBN’s spherical of February 5 (and the apply-up explainer on February 7) an instantaneous instruction to banks to terminate the account of every individual buyer that has ever traded in cryptocurrencies?

“No. By my reading, the instruction used to be to terminate accounts linked to cryptocurrency exchanges,” says Adeoye Adefulu of Odujinrin and Adefulu

Fred Onuobia of G. Elias & Co, says banks truly have two choices with appreciate to the CBN’s directive: either return transfers or deposits acquired for the make a selection of cryptocurrencies or terminate accounts they reasonably take into accout are damaged-all the very best blueprint down to fund transactions in cryptocurrencies. 

“Actions that a bank will make a selection on this regard activates the CBN’s interpretation of and the bank’s working out of the purport of the CBN directives,” Onuobia says.

The response from lawyers at Olaniwun Ajayi LP unpacks two key words from the CBN directive:

Provided that the letter makes exhaust of the terms “dealing in” and “facilitating” payments for cryptocurrency exchanges as a floor for the rapid closure of accounts, which connotes exact, most recent activity, our scrutinize is that the letter needs to be read to intend closure of accounts at the 2d dealing in or facilitating payments for cryptocurrency exchanges and would now not characteristic with retroactive live.  

Then all but again, we ask banks to determine out whatever brilliant steps they deem wanted to be sure compliance even if such action is borne out of factual erring on the aspect of warning.”

  1. What’s your scrutinize on whether this account closure amounts to retroactive punishment? The CBN’s closing spherical on crypto used to be from January 2017 and it did now not prohibit banks from enabling such transactions.

Our sample of lawyers here is tiny, but there might maybe be a consensus: the CBN’s directive on account closure mustn’t apply retroactively.

In step with the wording of the directive, the CBN would now not intend that the closure of accounts will be retroactive,” Soyibo says.


“It simply implies that contributors and entities facilitating payments for cryptocurrency exchanges on a going forward foundation will no longer be ready to live such transactions by utilizing their accounts with banks and need to even have such bank accounts closed.”

The Olaniwun Ajayi personnel gives a identical opinion. 

To the extent that the letter is restful on the timeline of the applicability of the letter, the subject of retroactive interpretation or application therefore would now not arise. 

Then all but again, it might maybe almost definitely additionally fair now not be surprising to search out monetary establishments closing accounts of other folks that traded in cryptocurrency in the previous on the premise that such accounts raise sure suspicions pursuant to the letter.”

Adefulu agrees with the views above. On the CBN’s insistence that the most most recent directive is merely a reminder of the 2017 spherical, he says: 

“There is now not the kind of thing as a varied formulation to read the 2017 spherical varied than it permits banks to have crypto exchanges as potentialities as prolonged as they be sure that they’ve effective [anti-money laundering] controls. 

The perfect prohibition in that spherical used to be in opposition to banks maintaining/trading virtual currencies with their very possess money.”

  1. What’s the final due task for closing buyer accounts? I quiz because as a minimum one bank would now not appear to be notifying affected potentialities that their accounts are being closed.

The Olaniwun Ajayi personnel says banks are supposed to inform a buyer whose account is set to be closed in opposition to their will:

“…the Bank notifies the client of the infraction and might maybe almost definitely additionally make a selection the action, as a mode of restriction, to terminate the account. Where there come in funds in the account, the bank disorders a bank draft in the name of the client for the obtainable funds.” 


Soyibo says account closure processes might maybe almost definitely additionally fair fluctuate from one bank to 1 other and that it’s subject to the terms below which the account used to be opened. His scrutinize is that while banks on the total uncover a buyer that their account will be closed, “the bank might maybe almost definitely additionally fair now not [be] obliged to present a motive in the good thing about the closure of the account. 

In such cases, Soyibo says “the [rationale] for such closure will be resulting from suspicious activity or transactions by the client.”

  1. On your scrutinize, is it in truth wanted for banks to terminate accounts that can have traded in the previous? What’s the live of almost definitely closing thousands of accounts in the banking plan?

Soyibo gives a straight answer:

“Personally, I enact now not mediate it’s serious for banks to terminate the accounts of other folks or entities that have traded in cryptocurrencies in the previous notably where there might maybe be no anecdote repeated activity in trading in cryptocurrency transactions”

For the Olaniwun Ajayi personnel, the banks’ choice here is influenced by a preference to lead clear of CBN penalties and err on the aspect of warning.

“In the absence of an relate interpretation of the phrase ‘dealing in’ or ‘facilitating’ payments with cryptocurrency exchangers, the banks might maybe almost definitely be required to determine whether accounts which have traded in the previous might maybe almost definitely be caught by the provision and be at risk of be closed.” 

Also, banks might maybe almost definitely additionally fair now not be very referring to the unfavorable impacts of account closure if they take into accout there might maybe be a higher risk to the monetary balance of the country to crawl away the accounts originate and operational, the Olaniwun Ajayi personnel says.


If that is the case, it will now not be a surprise if banks make a decision to proceed with retroactive account closures, whether or now not they are questionable and kept away from prior records to potentialities.

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