The Federal High Court, Abuja, has lifted the freezing order on six bank accounts previously indicted by the Economic and Financial Crimes Commission (EFCC) for trading cryptocurrencies between the naira and other currencies at prejudicial rates to the Nigerian financial system.

On Monday, Justice Emeka Nwite lifted the protective order on the following accounts: Awe Microfinance Bank (N2,367,624.45), Olalekan Sibiku Adesugba (N3,375,435.41), Ad Ishola Farms (N10,104,482.91), H. Ishola Multibiz Int’l ( N16 505 822.74), Microtech Investment Services (N3,545,660.73) and HML Business Ventures (N53,585,649.77).

The move came after the EFCC filed an affidavit on November 25, 2024, stating that its investigation revealed that the funds in these accounts, totaling 89,484,694.01 Naira, were not linked to any illegal activity.

Nairametrics had previously reported that the EFCCon September 4, 2024, obtained an order freezing N548.6 million in bank accounts belonging to alleged crypto users on platforms such as ByBit, KuCoin and others, based on their alleged role in the fluctuations of the naira.

The motion, dated September 3, 2024, which the court relied on to freeze the funds, drew legal attention to major foreign crypto platforms ByBit and KuCoin, accusing them of contributing to the devaluation of the Nigerian currency .

Facts of the case

• An EFCC investigator, Okoro Philip, said in his affidavit, seen exclusively by Nairametrics at the time, that in the months leading up to April 18, 2024, Nigeria experienced a significant stabilization of its currency, the dollar. trading between 980 naira and 1 dollar on the black market. However, on April 18, 2024, the dollar fell from 1,250 naira to $1 in the parallel market.

• He alleged that further investigation and intelligence indicated that “these fluctuations were mainly due to activities on platforms such as ByBit, KuCoin and other similar cryptocurrency platforms.

• Philip also noted that 22 bank accounts, domiciled in various Nigerian banks and mentioned in the petition, belonged to individuals selling USDT, who provided their accounts in naira to transfer the naira equivalent of USDT.

• The prosecution also accused cryptocurrency platforms of deliberately ignoring Nigeria’s anti-money laundering laws and regulations, allowing users to operate under a veil of secrecy.

• The EFCC lawyer, Ekele Iheanacho SAN, had urged the court to freeze the bank accounts listed in the petition, which belonged to persons being prosecuted or under investigation for unauthorized foreign exchange transactions, money laundering money and terrorist financing, pending the conclusion of the investigation and prosecution. .

• The application was filed in open court on September 4, 2024 and granted by Justice Emeka Nwite.

Discharge movement

• About a month after the initial order, Iheanacho filed an affidavit to vacate the freezing orders on some of the 22 accounts.

• In an affidavit narrating the facts of the investigation, filed by Charles Anele, an officer of the EFCC and accessed exclusively by Nairametrics, he explained that the EFCC carried out various investigative activities on the accounts subject to the order of frost.

“Investigative activities include analyzing financial records of transactions made by bank account operators to determine the sources and destinations of funds; inviting and questioning account operators and certain people likely to shed light on suspicious transactions,” » he declared.

• He also revealed that following a plea bargain agreement, an operator of the account listed at number 21 in the petition forfeited funds to the Federal Government of Nigeria.

• Another company linked to the suspect was convicted for charge No. FHC/ABJ/CR/308 between FRN and Official Gredo Limited.

• He added that the investigation showed that the funds in the accounts listed in number 9 were linked to one Oty U. Stanley, who is currently facing criminal proceedings under the number FHC/ABJ/CR/306/2024, where the parties entered. in a plea bargain agreement.

• However, he said investigations into six of the 22 frozen accounts found no links to illegal activities, leading to a request to the court to unblock those accounts.

“The petitioner (EFCC) has concluded its investigation into the accounts listed at numbers 5, 8, 10, 11, 19 and 22 in the petition, and the funds in these accounts have not been linked to illegal activities.

“Taking into account the results of the investigation so far, it is appropriate to cancel the protective order on the accounts listed at numbers 5, 8, 10, 11, 19, 21 and 22.”

He further said that investigations into the remaining accounts were not completed as some people had not yet honored their invitations and other documents were being analyzed.

What happened in court

• When the hearing resumed on Monday, Iheanacho urged the court to set aside the order freezing the identified bank accounts, based on the affidavit already submitted.

“Request granted“, replied Judge Nwite, thus unfreezing the six bank accounts.

The judge also ordered that the respective banks be informed in writing about the order to release the other accused accounts, whose freezing period had expired due to the passage of time.

What you need to know

This development follows a previous court order freezing 1,146 accounts for 90 days (from April 25, 2024 to July 23, 2024) due to illegal financial transactions.

An affected party subsequently requested the lifting of several freezing orders, and the court granted this request.

However, the EFCC filed a fresh application to continue its investigation, after initiating criminal proceedings against some of the account operators.

Nairametrics reports that the EFCC and the Federal Inland Revenue Service (FIRS) are already in court against Binance for tax evasion and money laundering offenses involving $35.4 million.

The EFCC petition then extended its indictment to ByBit and KuCoin, accusing them and several anonymous crypto platforms of allowing Nigerian users to engage in “discovery, confirmation and market manipulation.” through their platforms, causing “distortions in the market, resulting in the naira losing its value compared to other currencies.

ByBit remains one of the few cryptocurrency exchanges to still offer a peer-to-peer section on its platform, following a crackdown on other exchanges like Binance, which led to the delisting of their peer-to-peer categories -peer.

ByBit also offers crypto trading options on its platform and remains a favorite among Nigerian crypto traders. Nigeria’s National Security Advisor (NSA) has classified cryptocurrency trading as a national security concern.

This led the Central Bank of Nigeria (CBN) to order five fintech companies – OPay, Palmpay, Moniepoint, Kuda and Paga – to stop onboarding new customers.

In response, these fintech companies subsequently announced a ban on cryptocurrency or virtual currency transactions on their platforms.

Under the supervision of the CBN, fintech companies are now required to report any cryptocurrency account transactions to the NSA, through their regulator, the CBN.

KuCoin’s VAT charges come amid the Nigerian government’s crackdown on cryptocurrency exchanges and related transactions, which led to Binance leaving the market.

This crackdown also forced Binance and KuCoin to halt P2P NGN/USD trading on their platforms.