Nigerian Authorities Fine Two Crypto Firms $30,000

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Hassan Shittu

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Hassan Shittu

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Last updated: 

November 8, 2024

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According to Nairametrics, a Nigerian local news source, the Federal High Court in Abuja has convicted two crypto firms, Egomsinachi Road Autos Limited and Chimera Log & Haulage Services Limited, for engaging in illegal USDT-to-Naira transactions.

This conviction, handed down by Justice Joyce AbdulMalik on Thursday, continues the Economic and Financial Crimes Commission’s (EFCC) aggressive enforcement against unlicensed crypto trading platforms in the country.

As part of the judgment, the court has ordered the companies to forfeit N50 million (approximately $30,000) from their accounts to the EFCC recovery account.

The case is the third conviction the Federal High Court reported for illegal crypto trading, following a similar judgment against another crypto firm, Official Gredo, just weeks earlier.

Two Crypto Firms Convicted: Is Nigeria Policy Too Strict?

According to the local source, Thursday’s proceedings were caused by Egomsinachi Road Autos Limited and Chimera Log & Haulage Services Limited’s failure to comply with regulations.

The regulation requires them to report their financial transactions to the Special Control Unit on Money Laundering (SCUML), as stipulated under Section 11(3) of the Money Laundering (Prevention & Prohibition) Act, 2022.

According to Nigerian financial regulations, both companies were found to have been conducting unlicensed USDT-to-Naira trading, an activity they are not authorized to engage in.

These companies were also accused of operating in the specialized financial sector without the necessary licensing despite not being authorized dealers in the Nigeria Autonomous Foreign Exchange Market.

During the arraignment, Chukwubuka Felix Ogumba, the director of both companies, pleaded guilty to the charges on their behalf. This plea paved the way for a plea bargain agreement with the EFCC.

In court, EFCC prosecutor Ogechi Ujam urged the judge to approve the conviction in accordance with the plea bargain arrangement.

Justice AbdulMalik confirmed the arrangement after ensuring that Ogumba had entered into it voluntarily.

Ogumba’s legal counsel, Chikaoso Ojukwu SAN, supported the plea deal and urged the court to ratify it.

As a result, each company was ordered to forfeit N25 million (about $13,000) to the Nigerian government, a sum the EFCC recovered during its investigation.

In addition to this forfeiture, the companies were fined N500,000 each, which must be paid to the federal government.

Furthermore, the court ordered that Ogumba, the convicts’ director, submit an affidavit of good behavior before the court.

The EFCC’s Ongoing Crackdown

The conviction of Egomsinachi Road Autos Limited and Chimera Log & Haulage Services Limited is part of the EFCC’s broader crackdown on illegal crypto trading in Nigeria.

These companies join a growing list of entities under investigation for unlicensed trading of USDT-to-Naira transactions.

The EFCC has identified several individuals and firms accused of using unauthorized cryptocurrency platforms to manipulate the value of the Naira and launder illicit funds.

In a similar case earlier this year, two other Nigerian crypto companies, Paparaxy Global Ventures Limited and Lemskin Technologies Limited, were ordered to refund the government N160 million (around $95,000) after being accused of engaging in illegal financial activities.

The EFCC’s investigation revealed that these companies were part of a larger network manipulating exchange rates and using crypto platforms to carry out illicit financial transactions.

This recent conviction comes as the EFCC is also working to freeze significant amounts of money linked to unauthorized foreign exchange activities.

The court has already secured orders to freeze over $325,000 held in accounts associated with individuals and businesses suspected of engaging in illegal USDT-to-Naira transactions.

Notably, the Nigerian government has officially dropped money laundering charges against Binance executive Tigran Gambaryan, who has been detained since February and has left Nigeria after charges were dropped.