Nigerian Court Passes Ruling against CBN for Freezing of Company’s Accounts over Crypto Trading Allegations

Federal Court in Nigeria passes a ruling against the complainant who accused Rise Vest Technologies that the company was involved in crypto trading and also got the company’s bank accounts frozen through the directive passed by the Central Bank of Nigeria. The Court came to the conclusion that the allegations are baseless and ill-founded and therefore the accounts of the company accused of crypto trading must be reopened forthwith.

A landmark ruling has been passed recently by the Federal Court of Nigeria in which allegations of fraud were leveled against a company. On the basis of the allegations of the complainant, the Central Bank of Nigeria (CBN) had frozen the bank accounts of the accused company. However, the Federal Court has dismissed the directives of CBN and ordered the bank to reopen the accounts forthwith.

The case involved a company namely “Rise Vest Technologies”, which was accused of trading crypto.

It was in the month of August, 2021, when CBN took notice of Rise Vest Technologies. CBN accused the company for engaging in crypto trading without registration. In addition, CBN claimed that crypto trading has been declared illegal in the country. CBN relied on its directive of 6th February, 2021 and went on to direct the company’s banks to freeze company’s accounts. Acting under the directions of CBN, company’s banks then froze the accounts of Rise Vest Technologies even without giving any notice.

Being aggrieved by the orders of CBN and the actions of the banks, Rise Vest Technologies filed a case before the Federal Court. The case came up for hearing at several hearings before Judge Taiwo Taiwo.

In his ruling, Judge Taiwo noted that CBN acted beyond its mandate and abused its authority and power. The Judge also observed that CBN’s directives is not a law and therefore cannot be treated as such in any manner whatsoever. On the basis of mere assumption that 6th February’s directive is the law, CBN cannot take extreme measures against a lawful company. By no stretch of imagination CBN was allowed to ask the banks of Rise Vest Technologies to freeze its bank accounts. Such an action is against the law and against the principal of natural justice.

The Court further observed that no commendable evidence was put forward by CBN. The bank failed to establish the case and prove the fact that crypto trading was illegal. In fact, no section of any particular law was referred to by CBN which proves that crypto trading was declared illegal. Judge Taiwo noted that bare perusal of CBN’s counter affidavit shows that the decision of freezing was based on mere assumptions.

In the end, the Court came to the conclusion that injustice has been caused upon Rise Vest Technologies. The Court then directed CBN as well as the company’s banks to immediately reinstate the bank account facility.