• Dami Afam Ade-Odiachi

Is it legal for Nigerian Banks to enforce the CBN's retroactive penalty for trading crypto?

Nigeria’s a funny place.

It isn’t Ha! Ha! Funny.

It’s funny in this way.

There’s a man. He’s walking towards a patch of ice. It’s really rather obvious, the ice. So you’re pretty sure he knows what he’s doing. You’re sure he’ll walk around it. He gets even closer to the ice, and then you start to worry. You call out to him.

“Mr. Man. There is ice in front of you oh! You will fall if you’re not careful.”

He acts like he can’t hear you. He ignores you. You shrug and stop shouting about the ice, because you don’t have much control over what another person does.

Instead of screaming yourself shrill, you pull out your phone and hit record. People falling down are funny, and anything that makes people laugh is good content.

The man steps on the ice, slips, and falls flat on his bottom.

You laugh.

Ha! Ho! Ha! Ho! Kee! Kee! Kee!

You howl.



It’s a good laugh. It’s a look at that idiot be an idiot kind of laugh.

You pause for a minute. Your conscience is bothering you.

“Don’t laugh.” It says. “A man falling is not funny. Help him!” It continues.

You kiss your teeth and laugh some more, because it’s not like you didn’t try to stop him, and the fall wasn’t too bad. He didn’t die.

The man gets up. He sees you laughing at his misfortune.

Ha! Ho! Ha! Ho! Kee! Kee! Kee!

He doesn’t like this very much. He feels embarrassed. He pulls a gun out of nowhere and shoots you in your chest. The bullet brushes past your heart.

You scream, “Ah! Why?”

The man doesn’t answer. Instead he laughs your laugh.

Ha! Ho! Ha! Ho! Kee! Kee! Kee!

He howls.


That’s how the Nigerian government is funny.

It frequently pursues policies that are steeped in stupidity and brewed in madness, then when you go on social media to complain it attempts to ban you, and when you go on the streets to protest, it shoots you.

Typically, in democracies, at least in this century, when you think of governments you do not also think of their Central Bank. They’re separated, the central bank is independent, and it’s with good reason. The less independent a Central Bank is the higher inflation tends to be. Nigeria’s inflation target is 10% and it’s missed that target for the last 4 years. This is partly because the Central Bank keeps printing Naira and lending it to the Nigerian government.

But this isn’t the main problem I’m having with the Central Bank, it’s the absolute lack of sensibleness and the complete dedication to capriciousness when it comes to policy making. When people aren’t thinking, it shows. An example of this would be the account freezes that accompanied the ENDSARS movement. They were issued illegally. The court orders to freeze the accounts were signed after the accounts were frozen - not before, and Nigeria’s Chief Justice said in an interview that he’d given the Central Bank a couple of pre-signed court orders before the movement actually started. That’s basically the same thing as the Nigerian Police having a warrant for my arrest before I commit the crime. It’s why the Central Bank is losing cases in court to defend the account freezes. Just the other day the Nigerian Federal High Court ruled in favour of Gatefield’s Journalism Fund, finding that the Central Bank’s illegal account freeze was in bad faith and indefensible.

This brings us to the CBN’s Cryptocurrency policy which banks are now enforcing. They’re freezing accounts that traded Bitcoin and other crtyptocurrencies before Nigeria’s Central Bank banned Bitcoin transactions. I did a little thinking about this, and it didn’t seem very legal, so I asked a very good money lawyer, Nutri C Yoga Maestro about it, and here’s what he said:

“Generally, the law frowns upon retroactive legislation (laws applying backwards in time). This is especially so when some sort of sanction is being imposed. Under Nigerian law the constitution prohibits retroactive criminal legislation. The CBN hasn’t explicitly made trading crypto a crime, but it has directed a penalty on individuals through the closure of their accounts. And we are seeing the enforcement of this directive in reverse to bank accounts that traded before the directive, not after. In essence, that’s basically a retroactive administrative penalty. I think there are grounds to argue illegality, but it will be tricky. CBN will try to argue that it said it was illegal since 2017, even though that circular never said so. And Nigerian judges can be mad so…”

Someone once said to me that if you’re going to do something bad, then the least you can do is do it in a good way; that to do it any other way is madness.

At the moment, we’re screaming at the man walking towards the patch of ice. We’re saying if you keep walking, you’ll slip, and you’ll fall, and it will be the funniest most unfunny thing that’s ever happened. But he can’t hear us. He’s walking there anyway. The Central Bank of Nigeria is developing a taste for illegality, if we let it continue, it will mature into an addiction, and then we’ll really be sorry.

Happy Days,


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