Key Takeaways:
- The Nigerian government has frozen approximately $38 million in cryptocurrency linked to ongoing protests against rising living costs.
- The Economic and Financial Crimes Commission (EFCC) claims the funds are connected to individuals under investigation for money launderingย
In a significant move, a Nigerian court has ordered the freezing of approximately $38 million in cryptocurrency, believed to be tied to the ongoing protests against the countryโs escalating cost of living.
The Federal High Court in Abuja issued this order following a request from the Economic and Financial Crimes Commission (EFCC), as reported by Premium Times.
The court’s decision aligns with broader government efforts to curb the protests that have gained momentum in response to Nigeria‘s worsening economic situation.ย
National Security Adviser Nuhu Ribadu revealed during a Council of State meeting on August 13 that the government had successfully blocked 83 billion Nigerian naira (around $52 million) in both cryptocurrencies and fiat currencies linked to the protest organizers.
These protests are a direct response to the countryโs severe economic crisis, which has seen inflation soar to 33.2%โa 28-year highโexacerbated by the naira’s sharp devaluation against the U.S. dollar. The dire economic conditions have sparked widespread discontent, prompting citizens to take to the streets.
The EFCCโs freeze order specifically targets four cryptocurrency wallets reportedly holding approximately 37 million USDT, a stablecoin pegged to the U.S. dollar. The EFCC claims that these wallets are linked to individuals under investigation for money laundering and terrorism financing.
However, the exact connection between the frozen funds and the protests remains unclear, as the official court documentation does not explicitly link the wallets to the demonstrations.
The governmentโs move to freeze funds linked to the protests is seen as part of a broader strategy to stifle the movement by cutting off its financial backing. Earlier this year, the Bank of Nigeria Governor Olayemi Cardoso highlighted concerns over the untraceable outflow of $26 billion from the country via crypto exchange Binance, which significantly impacted tax revenues.ย
This concern led to the detention of a Binance official, Tigran Gambaryan, during his visit to Nigeria for discussions on the matter.
While the freeze on protest-related funds represents a significant escalation in the governmentโs approach, it is uncertain how effective this will be in quelling the protests. The ongoing economic hardships, including the highest inflation levels in nearly three decades, continue to fuel public frustration and unrest.
The situation also underscores the challenges governments face in regulating cryptocurrency transactions. Unlike traditional financial systems, blockchain technology offers a level of anonymity and decentralization that complicates efforts to enforce freezes and track funds.
This ongoing activity in the frozen wallets highlights these challenges, as authorities struggle to fully control the financial flows supporting the protests.
Amid these developments, voices within Nigeriaโs cryptocurrency community are calling for industry-specific demands to be included in the broader movement against bad governance. The protests, seen as an opportunity to push for regulatory reforms, could significantly impact both the crypto industry and the Nigerian economy at large.
