Justice Taiwo Taiwo of the Federal High Court, Abuja has ordered the Central Bank of Nigeria (CBN) to unfreeze the accounts of fintech companies pointing out that a circular does not translate into law.
The CBN had on August 17, secured, through an ex parte motion, an order freezing the accounts of Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited for 180 days over alleged forex infractions.
Rise Vest Technologies Limited in a swift reaction said it was cooperating with the apex bank regarding the court order to freeze its bank account according to a statement to reassure its customers of the safety of their funds and the platform’s willingness to cooperate with regulators to address issues of concern.
It said, “With regard to the latest news about us and our FX dealings, you can be sure that your investments and funds are safely managed, that funding and withdrawals will continue to be processed as normal, and that our U.S operations remain intact.
However, the company in a motion filed through its counsel, Seni Adio, noted that there was no evidence that it engaged in unlawful conduct, adding that the CBN did not meet its burden of proof in support of its allegations.
Delivering judgment on the application on Monday, Justice Taiwo held that the apex bank failed to provide any law showing that it is illegal to deal in cryptocurrency in Nigeria, adding that the CBN circular, referenced as BSD/DIR/PUB/LAB/014/001 of February 5, 2021, is not a law.
The judge held that although the CBN has the power to investigate any infraction, the infraction must relate to BOFIA or any other enactment administered by the regulator.
“I have perused the counter affidavit of the respondent and I see that the reason for freezing the account of the applicant is based on the alleged infraction of the circular of the CBN. The law is trite that any conduct that must be sanctioned must be expressly stated in a written law,” he said.
“Being unknown to law, circulars cannot create an offence because it was not shown to have been issued under an order, Act, Law or Statute.
“The learned counsel for the respondent has also raised the issue of public policy in his submissions against the application.
“Can this court decide this application based on public policy as being urged on it by the learned counsel for the respondent? I think not.
“I hereby discharge the interim freezing order of this court made on August 17, 2021, made against the defendant/ applicant,” the judge said.