The Digital Rights Lawyers Initiative (DRLI) has asked the Federal High Court in Lagos to quash the Central Bank of Nigeria (CBN)’s letter prohibiting banks from dealing in cryptocurrencies and closing down of suspected bank accounts.
It further asked the court for a perpetual injunction restraining the apex bank from regulating and/or further regulating virtual currencies/ cryptocurrencies in Nigeria.
According to DRLI, the CBN lacks the power to regulate cryptocurrencies.
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The CBN and the Securities and Exchange Commission (SEC) are the first and second defendants in the suit marked FHC/L/CS/ 188/2021, filed on Monday, February 8, 2021.
Crypto Currencies
The DRLI sought the following reliefs:
“1. A DECLARATION that by virtue of the 2nd Defendant’s Circular dated 14th September 2020 Virtual Currencies/CryptoCurrencies are securities (digital assets and/or immovable properties) protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
“2. A DECLARATION that by virtue of section 13(a), (b), (i), (j), (k), q), (x), (y) and (z) of the Investments and Securities Act 2007, the 2nd Defendant is the apex regulatory body over securities in Nigeria to the exclusion of the 1st Defendant.
“3. A DECLARATION that the 1st Defendant lacks powers to regulate cryptocurrencies, hence its Letter dated February 5, 2021, with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies is ultra vires, unconstitutional, null and void.
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“4. A DECLARATION that the 1st Defendant Letter dated February 5, 2021, with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies is likely to be used to violate the Plaintiff’s members rights guaranteed under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (As amended)
“5. AN ORDER setting aside the 1st Defendant Letter dated February 5, 2021, with reference number: BSD/DIR/GEN/LAB/14/001 with respect to cryptocurrencies for being ultra vires, unconstitutional, null and void.
“6. PERPETUAL INJUNCTION restraining the 1st Defendant from regulating and/or further regulating virtual currencies/ cryptocurrencies in Nigeria.”
In seeking the reliefs, DRLi asked the court to resolve two questions as follows:
“i. Whether or not by the interpretation of the 2nd Defendant’s Circular dated 14th September 2020 Virtual Currencies/CryptoCurrencies are securities (digital assets and/or immovable properties) protected under section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended)?
“ii. Whether or not by the interpretation of section 13 (a), (b), (i), (j), (k), q), (x), (y) and (z) of the Investments and Securities Act 2007, the 1st Defendant can validly regulate securities in form of Cryptocurrencies?”
The suit was is yet to be assigned to a judge.
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