Banks in Nigeria have been advised to stir clear of Bitcoins and other cryptocurrencies following a directive by the Central Bank of Nigeria (CBN) to this effect.
In a warning issued by the CBN via a circular signed by the CBN Director of Financial Policy and Regulation Department, Mr. Kevin Amugo, CBN said virtual currencies (VCs) such as bitcoin, ripples, magneto, litecoin, dogecoin, peercoin, one-line, and others, have not been recognised as legal tender in Nigeria but which are already being traded in exchange platforms that are unregulated all over the world.
Since such payments and exchanges using VCs were largely untraceable and anonymous, making them susceptible to abuse by criminals, especially in money laundering and terrorism, banks and financial houses should not accept them.
It said: “The attention of banks and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation decision by the CBN.
•Ensure that you do not use, hold, trade, and/ or transact in anyway in virtual currencies; Ensure that existing customers, that are virtual customers exchangers, have effective AML/CFT controls that enables them to comply with customers’ identification, verification and transaction monitoring requirements.
“Where banks or financial institutions are not satisfied with controls put in place by the virtual currency exchangers/customers the relationship should be discontinued immediately, and lastly, Any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit (NFIU).”
