A hearing on cryptocurrency should be held by the Nigerian Senate, Rume Ophi of CryptoPreacher

'A hearing on cryptocurrency should be held by the Nigerian Senate,' Rume Ophi of CryptoPreacher

In an appeal to the Nigerian Senate, Rume Ophi, founder of Cryptopreacher Academy, a rapidly expanding crypto academy in Nigeria, has called for a hearing on cryptocurrencies in order to gain a better understanding of why Nigerians are adopting them.

Nigeria has maintained its position as the country with the highest rate of cryptocurrency adoption. Despite the Central Bank of Nigeria's strenuous efforts to stifle cryptocurrency adoption in the country, this has happened nonetheless.

In response to this growing adoption, the CryptoPreacher, who is also an analyst for Channels Television, has called on the Nigerian senate to investigate the phenomenon and, if necessary, pass legislation to regulate the cryptocurrency space.

The cryptocurrency expert referred to the cryptocurrency committee of the United States Congress, which held a hearing on November 17 titled "Demystifying Crypto: Digital Assets and the Role of the Government," which was broadcast live on the internet. The hearing was presided over by Representative Don Beyer, who has previously proposed legislation to expand the regulatory and legal framework for digital assets in the United States.

The Central Bank of Nigeria's (CBN) clampdown on cryptocurrency users

In February 2021, the Central Bank issued a directive directing all banks to stop facilitating transactions involving accounts suspected of dealing in cryptocurrency transactions. A significant impact was had on the operations of cryptocurrency exchanges and businesses in Nigeria as a result of this directive.

This prohibition, according to the apex bank, is based on the following grounds:

• Cryptocurrency is completely impervious to oversight, accountability, and regulatory oversight 
• There has been an increase in the use of cryptocurrency for criminal purposes.
• Price fluctuations in cryptocurrencies are extremely high and fluctuate constantly.
• The use of cryptocurrency has been prohibited in a number of other countries as well.
• There is no revenue generated by cryptocurrencies.

As a result of the CBN's restrictions, Nigerians were compelled to use peer-to-peer (P2P) platforms in order to deal with and transact in cryptocurrencies. Approximately 16 percent more Bitcoin P2P trading volume was transacted in the country within a week of the CBN order being issued. Nigeria processed $7.35 million in peer-to-peer transactions that week, an increase of $1 million from the $6.35 million processed in the week prior to the suspension.

Private-to-private (P2P) trading continued to thrive until the Central Bank of Nigeria (CBN) issued circulars to banks in November, instructing them to begin closing bank accounts suspected of being associated with cryptocurrency dealers. According to an FCMB circular, the following bank accounts have been identified as being of particular concern:

• These accounts receive a large amount of money every day from a large number of multiple payees located all over the country.
• Accounts that receive a large sum of money in a short period of time and must be redistributed to a number of different beneficiaries
• Banking institutions receiving funds in small amounts from a large number of unrelated wallets and transferring them to another wallet.
• Transactions involving the use of multiple accounts for no discernible business purpose, among other things, are prohibited.

Why Senate intervention might be necessary

Multiple legal experts have stated that the closure of bank accounts in response to a CBN directive is illegal. They include the following: Legal experts have stated that only a court order can be used to compel the freezing or closing of a bank account.

However, in the case of CBN vs Rise Vest, a judge at the Federal High Court in Abuja, Taiwo O. Taiwo, asserts that the Central Bank of Nigeria (CBN) is not permitted to freeze a bank account in the absence of a law authorizing such action.

In a similar vein, a blockchain advocacy group, the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), has stated that the Central Bank of Nigeria (CBN) cannot declare cryptocurrency trading illegal in the country and that dealers cannot be punished because there is no such legislation in place.

"A bill criminalizing or prohibiting cryptocurrency trading is currently pending in the Nigerian National Assembly, but no such legislation has been introduced. It follows as a result that the Central Bank of Nigeria's statutory authority to order the permanent freezing or closure of these accounts is questioned "According to a statement from the group

There is a strong implication here that Nigerian legislators are complicit in the ongoing drama involving cryptocurrency users and the country's financial regulator. In either case, a statute would resolve all of the issues that have arisen in relation to the subject matter. In addition, if lawmakers want to pass popular legislation, they must listen to the public in order to understand why people continue to flock to digital currencies despite regulator prohibitions on the practice.