The Central Bank of Nigeria (CBN) has weighed in to warn Nigerians against the use of virtual currencies, including bitcoin, ripples, litecoin, etc, given the current desperation by Nigerians to invest in the growing trend of Ponzi schemes.
In a statement released on Tuesday, the CBN stated that virtual currencies are largely used in financing terrorism and money laundering, considering the anonymity of virtual transactions. The apex bank stressed that anyone trading in bitcoin is doing so at his or her own risk.
“The attention of the bank and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN.
“Ensure that you do not use, hold, trade and/or transact in any way in virtual currencies. Ensure that existing customers that are virtual currency exchangers have effective capital AML/CFT controls that enable them to comply with customer identification, verification and transfer, monitoring requirements.
“Where banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchanger/customers, the relationship should be discontinued immediately.
“Any suspicious transactions by these customers should immediately be reported to the Nigerian Finance Intellignece Unit (NFIU).
“The CBN reiterates that VCs such as bitcoin, ripples, monero, litecoin, dogecion, onecoin, etc., and similar products are not legal tenders in Nigeria. Thus, any bank or institution that transacts in such businesses does so at its own risk.”
In the same vein, the Securities and Exchange Commission, SEC, had last week issued a similar warning. These recent cautions by Nigeria’s financial regulatory bodies is likely connected to the popular money doubling scheme, Mavrodi Mondial Movement, MMM’s announcement that its operations will now be via digital currency, specifically bitcoin.
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Bitcoin which has appreciated from four cents in 2010 to over $1,000 in 2017, was judged the best performing currency of the year 2016.