Nigerian crypto investors are questioning the central bank’s decision to flag p2p users
Nigerian crypto-investors using peer-to-peer (P2P) services have expressed concern about the Central Bank of Nigeria (CBN) flagging their bank accounts. The CBN’s decision to flag accounts is believed to be in relation to the almost $6.3 million (2.9 billion nairas) Flutterwave hack, as the bank accounts are yet to prove any link to the hack.
According to local news sources, Albert Onimole, Legal Adviser to Flutterwave, a Nigerian fintech company, on February 19, 2023, reported to the Deputy Commissioner of Police in Yaba, Lagos, a case of nearly $6.5 million (3 billion naira) illegally transferred from the accounts of his client.
On February 27, a motion was filed and granted in support of Flutterwave’s claims. According to the proposal, 107 accounts, including their fifth beneficiary, will be placed on Lien/Post-No-Debit (PND). So far, some of the locals have confirmed that their accounts have been frozen in connection with the hack.
The situation has continued to discourage P2P users from interacting with the various over-the-counter (OTC) markets that allow the trading of securities between two counterparties conducted outside formal exchanges and without the oversight of an exchange regulator, into which the hacked sum flowed Nigeria’s crypto market on various OTCs and users now face problems with financial intermediaries when they want to use P2P services for crypto transfer.
Investors around the world use P2P as a medium for the direct exchange of crypto between parties without the involvement of a central authority. They can choose to exchange cryptocurrencies for cryptocurrencies or crypto for cash. In 2021, the CBN announced a regulation that prevented financial institutions such as banks from enabling crypto usage. However, Nigerians managed to find a way forward and still maintain their leading position as Africa’s largest crypto hub through the use of P2P platforms.
Some community members believe this could affect the general interest of Nigerians who have yet to come on board the crypto-digital ecosystem to acquire digital assets.
A concerned Nigerian stated that the situation is causing some businesses to crumble. This is because unsuspecting entrepreneurs have received payments for their services with funds that were allegedly linked to the hacked amount, resulting in confusion and possible legal consequences.
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Despite strict crypto regulations by the CBN, the P2P market has helped Nigerian commerce. However, a financial analyst known as Sadeik calls it a black market hub for fraudsters who launder fraudulent funds. Sadeik went on to say that a friend of his lost more than 500,000 because the person he was trading with had his account flagged in the Flutterwave hack.
In an official statement, Flutterwave denied the hack, saying it identified an unusual trend of transactions on some users’ profiles and immediately launched a review in line with standard operating procedure, which revealed that some users who had not enabled any of our recommended security settings may have been susceptible . The statement adds that Flutterwave was able to resolve the issue before any harm was done to users.
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