By Timothy Olamide
The prohibition placed on the Banks by the CBN from facilitating payment for crypto currencies has elicited a lot of hues and cries from the general in the country, majorly from the youths. In short, Reactions have trailed against the circular issued by the CBN. Youths who are dealing in crypto currencies are been arrested and subjected to harassments by the law enforcement agencies. Bank accounts of individuals suspected to be dealing in Cryptocurrencies have been closed down.
The CBN Letter has caused a lot of confusion as to whether dealing in Digital currencies in the country is a crime. In this wise, this article tends to make clarification as to whether dealing in Crypto currencies is a criminal offence in Nigeria.
Is Dealing in Crypto Currencies a Crime in Nigeria?
The cardinal principle of our criminal jurisprudence is that for any act or omission to be an offence, that act or omission must be defined and punishment contained therein in a written law. This is expressly provided for in subsection 12 of section 36 of the 1999 constitution. It provides thus: Subject as otherwise provided in this Constitution, a person shall not be convicted of a criminal offence unless that offence is defined and the penalty therefore is prescribed in a written law, and in this subjection, a written law refers to an Act of the National Assembly or a Law of a State, any subsidiary legislation or instrument under the provisions of a law.
The above provision of the constitution has been supplemented by the provision of section 194 of the Administration of the Criminal Justice Act 2015 which provides for the offence with which a defendant is charged to be stated in the charge.
Section 21(10) of the 1960 Constitution now section 36(12) of the 1999 constitution has been given judicial interpretation in the case of Aoko v Fagbemi (1961) 1 ALL NLR 400. See also the case of A-G Federation v DR. Clement Isong (1986)1 WLRN 75, Asake v. Nigerian Army Council(2007) ALL FWLR(Pt.396)731 at 746-747 and the recent case of Olabode George v. FRN(2014) 5 NWLR(PT.1399) are very instructive in this area.
Having dealt with the provision of section 36(12) of the constitution, it becomes imperative to delve summarily into the substance of circular (letter) issued by the CBN on the 5th of February 2021, a directive to the banks and other financial institutions from dealing in crypto and facilitating payment for crypto currency exchanges .
Summary of the CBN letter of 5th February, 2021
Pursuant to the letter, the CBN stipulates that the dealing in cryptocurrencies and or facilitating payments for cryptocurrency exchanges by Financial Institutions is prohibited and further directed the Regulated entities to identify persons and entities that transact in or operate cryptocurrency exchanges and close all such accounts immediately.
It is no news that prior to the total prohibition letter of February 2021, CBN has issued warning to Nigerians dealing in virtual currencies at their own peril. Despite the CBN series of strong warnings against the dealings in the virtual currencies, the trading in the forbidden fruit has increased astronomically.
Now, looking at the content of the CBN letter one cannot but come to a term that it merely prohibits both the financial and non financial institutions from dealing and facilitating payments for crypto currencies. Closing down of individual persons or entities account operating or dealing in crypto currencies is not without its own legal implications. As court’s order through an ex-parte application must be obtained before a bank account of an individual can be closed or freezed
One question that comes to mind is that, can the CBN letter of 5th February 2021 or series of warning letters issued prior and after it be termed a written law or instrument under the provisions of a law which may warrant the Nigerian Police to apprehend and charge anyone dealing in the Virtual Currencies ? This article answers above question in the negative as the letter merely prohibits the financial institutions and non financial institutions from dealing and facilitating payments for crypto currencies. It does not expressly nor by implication penalised crypto trading.
The CBN’s series of warning letters on dealing in Cryptocurerencies , particularly that of the 5th January 2021 no doubt have elicited widespread reactions from the general public and equally generated confusions as to the legal status of dealing in the virtual currencies in the country. Many Nigerian citizens have been arrested by the Police on a non- existent crime on the mere basis of the CBN letter to the banks. This should not be so as Nigeria operate a Constitutional Democracy based on the rule of Law.
This writer is not oblivious of the provision of the law that Naira is the only legal tender in the country as a medium of exchange for goods and services. Diverse reasons and justifications adduced by the CBN’s letter cannot be described as crimes.
Nobody whether Nigerian citizen or non Nigerian can be arrested and charged for an act or omission which does not constitute an offence as at the time the act or omission took place nor contained in a written law and penalty prescribed thereof.
O .T. Olamide
Student Faculty of Law Abu, Zaria.
April 20, 2021.