Court Unfreezes Accounts Blocked by CBN for Cryptocurrency Trading

Court Unfreezes Accounts Blocked by CBN for Cryptocurrency Trading

Tuesday, October 26,2021 / 01:40 PM / by Robert Egbe of The Nation / Header ImageCredit: Ecographics

The Nation is reporting that a Federal High Courtsitting in Abuja has vacated with immediate effect an interim order throughwhich the Central Bank of Nigeria (CBN) froze the bank accounts in two banks ofa firm that traded in cryptocurrency.

The firm, Rise Vest Technologies Ltd, is one of thefirms offering brokerage services for Nigerians to invest in foreign stocks.

The CBN had claimed, among others, that some of suchdeals contravened its directive and were part of what was making the nairaweaker to the United States Dollar.

But Justice Taiwo O. Taiwo held that the CBN could notrely on a mere circular to freeze the bank account of a company using its bankaccounts to trade in cryptocurrency.

The judge noted that the CBN failed to provide any lawshowing that it is illegal to deal in cryptocurrency in Nigeria, adding thatthe CBN circular, referenced as BSD/DIR/PUB/LAB/014/001 of February 5, 2021, isnot a law.

Justice Taiwo ordered the two banks to immediatelygrant the firm unfettered access to the accounts.

The court, in an October 18 ruling obtained by TheNation on Monday, made the order while deciding a Motion on Notice brought byRise Vest Technologies, praying the court to discharge an interim freezingorder granted by the court on August 17, 2021, in Suit No: FHC/ABJ/CS/822/2021

The parties to the suit are CBN Governor(Plaintiff/Respondent) V Rise West Technologies Ltd (1st Defendant/Applicant)& five Others.

Rest Vest Technologies' Counsel, Mr. Seni Adio (SAN),had submitted that CBN did not present any evidence that the defendant engagedin any unlawful conduct, adding that the CBN did not meet its burden of proofin support of its allegations.

But CBN's counsel Mr. Mathew Onoja argued that theex-parte orders of the court sought to be set aside were proper, lawful andvalid.

He contented that the orders of August 17, 2021 in thesuit were in accordance with the provisions of Section 97 (1) of the Banks andOther Financial Institutions Act (BOFIA) 2021, which empowered thePlaintiff/Respondent to invoke the jurisdiction of the Court via an ex parteapplication.

In his ruling, Justice Taiwo upheld Adio's argument.

The judge observed, among others, that although theCBN had power to investigate any infraction, the infraction must relate toBOFIA or any other enactment administered by the regulator.

Court Unfreezes Accounts Blocked by CBN for Cryptocurrency Trading

Justice Taiwo held: "I have perused the counteraffidavit of the Respondent and I see that the reason for freezing the accountof the applicant is based on the alleged infraction of the circular of the CBN.

"The law is trite that any conduct that must besanctioned must be expressly stated in a written law".

"Being unknown to law, circulars cannot create anoffence because it was not shown to have been issued under an order, Act, Lawor Statute".

"The learned counsel for the respondent has alsoraised the issue of public policy in his submissions against the application".

"Can this court decide this application based onpublic policy as being urged on it by the learned counsel for the respondent? Ithink not".

"I hereby discharge the interim freezing order of thiscourt made on August 17, 2021, made against the defendant/ applicant".


The post Courtunfreezes accounts blocked by CBN for cryptocurrency trading first appearedin The Nation on October25, 2021.

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