Nigeria’s crypto market has scored another victory. A Federal High Court sitting in Abuja on Monday vacated an interim order which directed the Central Bank of Nigeria (CBN) to freeze accounts of two firms in two banks that were linked to cryptocurrency trading.
The financial regulator had in August ordered banks to freeze the accounts of some companies facilitating cryptocurrency trading and brokerage services for Nigerians to invest in foreign stocks. The companies; Bamboo, Risevest, Trove and Chaka have been fighting legally to undo the order.
The CBN had claimed that the activities of these companies contravened its directive and were partly responsible for the free-fall of the naira against the US dollar.
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Per Sahara, Justice Taiwo O. Taiwo, in his ruling said that the CBN could not rely on a mere circular to freeze the bank accounts of a company using its accounts to trade in cryptocurrency.
According to the Judge, the CBN failed to provide any law showing that it is illegal to deal in cryptocurrency in Nigeria, adding that the CBN circular, referenced as BSD/DIR/PUB/LAB/014/001 of February 5, 2021, is not a law.
Justice Taiwo therefore ordered the banks – Zenith Bank Plc and Guaranty Trust Bank – to immediately grant the firm unfettered access to the accounts.
The order was made by the court while ruling on a Motion on Notice brought by Rise Vest Technologies, praying the court to discharge an interim freezing order granted by the court on August 17, 2021, in Suit No: FHC/ABJ/CS/822/2021
CBN Governor (Plaintiff/Respondent) V RiseVest Technologies Ltd (1st Defendant/Applicant) & five others, are the parties to the suit.
Submission had earlier been made by RiseVest Technologies’ counsel, Mr Seni Adio (SAN), that CBN did not present any evidence that the defendant engaged in any unlawful conduct, adding that the CBN did not meet its burden of proof in support of its allegations.
But CBN’s counsel, Mr Mathew Onoja argued that the ex parte orders the court sought to be set aside were proper, lawful and valid.
He contended that the orders of August 17, 2021 in the suit were in accordance with the provisions of Section 97 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2021, which empowered the Plaintiff/Respondent to invoke the jurisdiction of the Court via an ex parte application.
Justice Taiwo, in his ruling, upheld Adio’s argument, while he observed, among others, that although the CBN had power to investigate any infraction, the infraction must relate to BOFIA or any other enactment administered by the regulator.
“I have perused the counter affidavit of the Respondent and I see that the reason for freezing the account of the applicant is based on the alleged infraction of the circular of the CBN.
“The law is trite that any conduct that must be sanctioned must be expressly stated in a written law.
“Being unknown to law, circulars cannot create an offence because it was not shown to have been issued under an order, Act, Law or Statute.
“The learned counsel for the respondent has also raised the issue of public policy in his submissions against the application.
“Can this court decide this application based on public policy as being urged on it by the learned counsel for the respondent? I think not.
“I hereby discharge the interim freezing order of this court made on August 17, 2021, made against the defendant/ applicant,” Justice Taiwo held.