The Restriction of Cryptocurrency Transactions by the Central Bank of Nigeria: A violation of Fundamental Human Rights as Guaranteed by the Constitution of the Federal Republic of Nigeria, 1999 (as amended)..
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Fundamental human rights mean those rights which are inseparable
from every human being, primarily for the reason that they are human
beings. The Constitution of the
Federal Republic of Nigeria, 1999 protects the human rights of every
Nigerian Citizen, and the breach of same by any action of any person, including
agents of the same, entitles the victim of such breach to damages,
compensation, as well as the court’s declaration of the infringing act as
unconstitutional. We all have heard of and seen popular cases where the courts
ruled the actions of various agents of the state including the state itself, as
well as ordinary members of the society as a violation of human rights and
against which, the courts ordered varying remedies in a bid to do justice.
The Central Bank of Nigeria is not above the jurisdiction of the
courts of law, hence this piece for the members of society to pursue the
reversal of the wrongful closure of bank accounts by the Central Bank of
Nigeria over cryptocurrency transactions, simply for being a violation of their
fundamental human rights.
Definition of Terms
Moveable Assets: Tangible or intangible property other than real
estate.
Bank Account: An agreement made with a bank that enables one to
deposit and withdraw, and in some cases, be paid some interest.
In simple terms, everything you own, aside from real property is
considered personal property. Your bank accounts and any other financial assets
such as investment accounts also count as personal property. They are not owned
by the bank, neither are they owned by the Central Bank of Nigeria. They belong
to the account holder(s) – YOU!
According to Section 44 of the Constitution of the Federal
Republic of Nigeria, 1999,
“No moveable property or any interest in an immovable property
shall be taken possession of compulsorily, and no right or interest in any such
property shall be acquired compulsorily in any part of Nigeria except in the
manner and for the purposes prescribed by law, among other things-
a. Requires the prompt payment of
compensation therefore and
b. Gives to any person claiming such
compensation a right of access for the determination of his interest in the
property and the amount of compensation to a court of law or tribunal.”
If from the above, we can validly establish that a bank account
itself (even without the money inside of it) is in fact, an intangible asset,
belonging to the person who opened same, then the government can only purport
to expropriate the same from him if there is a law to that effect, which satisfies
the provision of Section 44 of the Constitution of the Federal Republic of
Nigeria, 1999.
It, therefore, follows that the Central Bank of Nigeria’s Directive
of February 5, 2021, which directed all DMBs, NBFIs, and OFIs “to identify
persons and/or entities transacting in or operating cryptocurrency
exchanges within their systems and ensure that such accounts are closed
immediately” is unconstitutional, and therefore, void to the extent of its
inconsistency with Section 44 of the Constitution of the Federal Republic of
Nigeria, 1999. Do companies come under the realm of this protection, just like
humans? Of course!
This is so, because the directive means a compulsory closure and
seizure of bank accounts from owners without any law to that effect, contrary
to the contemplation of Section 44 of the Constitution of the Federal Republic
of Nigeria, 1999. The issue of volatility of Cryptocurrency and what’s not is
irrelevant, because the law is clear on the subject and did not make an
exception to the provision of Section 44 with regard to cryptocurrency. There
is also no law criminalizing the possession of cryptocurrency.
I would have thought that a competent legal department in the
Central Bank of Nigeria, seeing the sensitivity of its role, would advise the
Bank to sponsor a bill at the National Assembly to end the use of
cryptocurrency by Nigerians. Instead, we see a Central Bank that rushes to
issue a directive over something well beyond its powers. The moment the Central
Bank of Nigeria unlawfully extended its directive to the properties of
well-meaning Nigerians going about their businesses of trading cryptocurrency
and transacting with it for ease of doing business, it exceeded its
responsibility of regulating bankers and might as well be seen to have acted mala
fide. This does not spell good news, seeing that Nigerians can recover
financial damages and compensation from the Central Bank of Nigeria, due to its
actions and directives issued mala fide, which exposes them to the fangs of
raging litigation, as contemplated in Section 52 of the Central Bank of Nigeria
Act which gave immunity to the bank from such claims and as well qualifies the
immunity on the grounds that the action was taken bona fide.
It is my humble submission that the said directive of the Central Bank of Nigeria as highlighted above be withdrawn forthwith and that due process is followed in the regulation of cryptocurrency in Nigeria and all other sectors where we have witnessed executive rascality in recent times.
Get in touch
For further information, please contact:
Managing Partner, FRED OGUNDU & CO, LP - Nigeria
Tel +234 813 873 0840
fredogunduco@gmail.com
