igerian crypto investors who use peer-to-peer (P2P) services have raised apprehensions regarding the Central Bank of Nigeria's move to flag their bank accounts. The CBN's action is thought to be linked to the recent Flutterwave hack that amounted to almost $6.3 million (2.9 billion nairas), despite there being no confirmed connections between the bank accounts and the hack.
Local news reports state that on February 19th, Albert Onimole, the legal representative for Nigerian fintech firm Flutterwave, filed a complaint with the police in Yaba, Lagos, alleging that approximately $6.5 million (3 billion nairas) had been unlawfully transferred from his client's accounts.
A motion ex-parte was granted on February 27th in support of Flutterwave's claims, stating that 107 accounts and their fifth beneficiaries will be placed on lien/Post-No-Debit (PND). Some locals have confirmed that their accounts have been frozen in connection to the hack.
This situation has caused concern among P2P users, leading them to avoid interacting with various over-the-counter (OTC) markets, which facilitate the trading of securities between two counterparties outside of formal exchanges and without exchange regulator supervision. The hacked sum flowed into the Nigerian crypto market through different OTCs, causing issues for users when using P2P services for crypto transfers with financial intermediaries.
P2P platforms are popular among investors worldwide as they provide a means for direct cryptocurrency exchange between parties without central authority involvement. Investors may trade cryptocurrencies for other assets or convert them into cash.
In 2021, the CBN introduced a regulation prohibiting financial institutions such as banks from facilitating crypto transactions. However, Nigerians found a way to circumvent the restriction and maintain their position as Africa's largest crypto hub through the use of P2P platforms.
Certain community members believe this move could hinder the adoption of digital assets among Nigerians who have yet to join the crypto digital ecosystem. A concerned Nigerian has claimed that the situation is adversely affecting businesses, as some entrepreneurs have unknowingly received payments with funds allegedly connected to the hacked sum, leading to confusion and potential legal consequences.
Notwithstanding the CBN's stringent crypto regulations, the P2P market has aided Nigerian trade. However, a financial analyst called Sadeik has labeled it as a black market hub for scammers laundering fraudulent funds. Sadeik further shared that a friend of his lost over 500,000 naira due to a transaction with an individual whose account was flagged in the Flutterwave hack.
In an official statement, Flutterwave denied the hack and stated that it had identified an unusual transaction trend on some users' profiles, prompting a review in accordance with its standard operating procedure. The review reportedly revealed that users who had not activated recommended security settings may have been vulnerable to hacking. Flutterwave added that it was able to resolve the issue before any harm was inflicted on its users.
Got something to say about the Nigerian crypto investor’s comment or anything else? Write to us or join the discussion on our Telegram channel.
More from
Crypto News
category
