Cryptocurrency prohibition; Digital Rights Lawyers Sues CBN, SEC

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Following the Central Bank of Nigeria’s letter prohibiting banks from dealing in cryptocurrencies and closing down of suspected bank accounts, the Digital rights Lawyers Initiative (DRLI) has approached the Federal High Court challenging the said ban.

In Suit No. FHC/L/CS/ 188/2021, DRLI sued the Central Bank of Nigeria and Securities and Exchange Commission for the following reliefs:

1. A DECLARATION that by virtue of the 2nd Defendant’s Circular dated 14th September 2020 Virtual Currencies/Crypto Currencies are securities (digital assets and/or immovable properties) protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)

2. A DECLARATION that by virtue of section 13(a), (b), (i), (j), (k), q), (x), (y) and (z) of the Investments and Securities Act 2007, the 2nd Defendant is the apex regulatory body over securities in Nigeria to the exclusion of the 1st Defendant.

3. A DECLARATION that the 1st Defendant lacks powers to regulate cryptocurrencies, hence its Letter dated February 5, 2021 with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies is ultra vires, unconstitutional, null and void.

4. A DECLARATION that the the 1st Defendant Letter dated February 5, 2021 with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies is likely to be used to violate the Plaintiff’s members rights guaranteed under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (As amended)

5. AN ORDER setting aside the 1st Defendant Letter dated February 5, 2021 with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies for being ultra vires, unconstitutional, null and void.

6. PERPETUAL INJUNCTION restraining the 1st Defendant from regulating and/or further regulating virtual currencies/ crypto currencies in Nigeria.

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7. CONSEQUENTIAL ORDER(S) as this honourable court may deem fit to make in the circumstance.

In seeking the reliefs, DRLi is asking the court two resolve two questions as follows:

(I) Whether or not by the interpretation of the 2nd Defendant’s Circular dated 14th September 2020 Virtual Currencies/Crypto Currencies are securities (digital assets and/or immovable properties) protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)?

(II)  Whether or not by the interpretation of section 13 (a), (b), (i), (j), (k), q), (x), (y) and (z) of the Investments and Securities Act 2007, the 1st Defendant can validly regulate securities in form of Cryptocurrencies?

The suit was filed on Monday, 8 February 2021 but is yet to be assigned to any Judge in the division.

 

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