Nigerian Crypto Investors Face Account Freezing

Nigerian crypto investors using peer-to-peer (P2P) services are facing difficulties as the Central Bank of Nigeria (CBN) has flagged their bank accounts. The CBN’s decision is believed to be in relation to the recent Flutterwave hack, which saw almost $6.5 million (3 billion nairas) illegally transferred from the accounts of the Nigerian fintech company.

On February 27th, a motion ex-parte was filed and granted in support of Flutterwave’s claims, resulting in 107 accounts being put on lien/Post-No-Debit (PND), including their fifth beneficiaries. While the bank accounts have yet to be proven affiliations with the hack, some locals have confirmed that their accounts have been frozen in connection to the incident.

The situation has discouraged P2P users from using over-the-counter (OTC) markets, which allow trading of securities between two counterparties executed outside of formal exchanges and without the supervision of an exchange regulator. The hacked sum flowed into the Nigeria crypto market on different OTCs, and users now have problems with financial intermediaries when they want to use P2P services for crypto transfers.

Investors worldwide use P2P as a medium of direct exchange of crypto between parties without the involvement of a central authority. They may choose to swap cryptocurrencies for cryptocurrencies or crypto for cash. In 2021, the CBN announced a regulation that prevented financial institutions like banks from enabling crypto use. However, Nigerians were able to find a way forward and still maintain their leading position as the largest crypto hub of Africa through the use of P2P platforms.

Some community members believe that this situation could affect the general interest of Nigerians who are yet to join the crypto digital ecosystem in acquiring digital assets. The situation is causing some businesses to crumble as unsuspecting entrepreneurs have received payments for their services with funds that were allegedly linked to the hacked amount, resulting in confusion and possible legal repercussions.

Despite strict crypto regulations by the CBN, the P2P market has aided Nigerian trade. However, a financial analyst known as Sadeik calls it a black market hub for scammers laundering fraud funds. Sadeik went on to say that a friend of his lost more than 500,000 nairas because the person he transacted with had his account flagged in the Flutterwave hack.

In an official statement, Flutterwave denied the hack and stated that it identified an unusual trend of transactions on some users’ profiles and immediately launched a review in line with its standard operating procedure. The review revealed that some users who had not activated some of their recommended security settings might have been susceptible. Flutterwave was able to address the issue before any harm was done to its users.

The current situation highlights the need for increased security measures and awareness in the Nigerian crypto market. The CBN’s decision to flag accounts highlights the importance of financial institutions’ role in combating fraudulent activities. It also emphasizes the importance of financial intermediaries, such as banks, in ensuring that funds are not used for illegal purposes. The incident serves as a reminder for crypto investors to take necessary precautions and to only use reputable P2P platforms.


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LocalBitcoins Shuts Down After 10 Years

LocalBitcoins, a peer-to-peer (P2P) bitcoin trading platform located in Finland, has announced that it would be ceasing operations after more than a decade of providing services to its users.

On February 9, LocalBitcoins made the formal announcement that company will be discontinuing its services, citing the challenging market circumstances caused by the protracted bitcoin winter.

LocalBitcoins urged all of its clients to remove their cryptocurrency holdings from the site and instructed them to begin the process of removing Bitcoin (BTC) from the wallet associated with their LocalBitcoins account. According to the notification, customers have the ability to withdraw their cryptocurrency assets from their LocalBitcoins accounts for a period of one year. The company made the following observation: “However, of course, we advise you to continue with withdrawing sooner.”

According to the timeframe for the shutdown, starting on February 9, LocalBitcoins will instantly stop accepting any new registrations. On February 16th, all trading will be halted, and after that date, users will only be allowed to log in to their wallets to withdraw monies from their accounts.

The sudden shutdown of LocalBitcoins comes not long after the United States Financial Crimes Enforcement Network named the site as one of the most significant Bitcoin senders to the Russia-connected exchange Bitzlato. The United States authorities have initiated a significant enforcement action against Bitzlato, accusing the company of engaging in money laundering and allegedly assisting in the evasion of sanctions imposed on Russia.

Since October 2022, when we ceased providing Russian user accounts and accounts of users resident in Russia, our records show that there have been almost no transactions between LocalBitcoins and BitZlato. This information is based on the data we have collected.

Blomberg further emphasized that Know Your Customer and Anti-Money Laundering requirements were adhered to by LocalBitcoins in a stringent manner and that the company has been regulated by the Finnish Financial Supervisory Authority since 2019.

As was noted in the past, Russia was at one time one of the most important markets for LocalBitcoins. As of June 2020, the country had the highest volume of Bitcoin trades on the site. According to statistics provided by Coin Dance, the total trade volumes on LocalBitcoins have been steadily decreasing after hitting an all-time high in December of 2017.

Since February 2021, when they fell below 1,000 BTC for the first time, weekly Bitcoin trade volumes on LocalBitcoins have never recovered to their previous levels. The most recent weekly BTC trade volume that was reported on LocalBitcoins was 283 BTC, which is equivalent to around $6 million. According to statistics provided by CoinGecko, large cryptocurrency exchanges such as Coinbase conduct daily transactions totaling $282 million in digital currency.


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Crypto Adoption in Sub-Saharan Africa Rises, Study Shows

Crypto usage in Sub-Saharan Africa is becoming mainstream rather than speculation, according to a report by blockchain analytic firm Chainalysis.

The report dubbed “How Cryptocurrency Meets Residents’ Economic Needs in Sub-Saharan Africa,” disclosed that the number of small retail transfers has surged, despite the bear market occurring in May. On the other hand, transfers of different sizes have dropped.

Per the study:

“If many of the people carrying out small retail transactions are trading cryptocurrency out of economic necessity — especially in countries where the values of local fiat currencies are dropping, as we’ve seen in Nigeria and Kenya, for example — then those people may be more willing to continue trading despite price drops.”

Source: Chainalysis

The report pointed out that many young people in the region were taking the cryptocurrency route to build and preserve wealth despite low economic opportunities. 

Based on an interview with Chainalysis, Adedeji Owonibi, the founder of Nigeria-based blockchain consultancy Convexity, noted:

“We see a lot of daily traders who are trading to make ends meet.”

He added:

“We don’t have big, institutional-level traders in Sub-Saharan Africa. The people driving the market here are retail. Nigeria has a ton of highly educated young graduates with high unemployment rates, no jobs available — crypto to them is a rescue. It’s a way to feed their family and solve their daily financial needs.”

Chainalysis found out that the uniqueness of Sub-Saharan Africa was pegged on the high usage of peer-to-peer (P2P) platforms and the retail market based on the transaction volume witnessed. Per the report:

“Retail transfers make up 95% of all transfers, and if we drill down to just small retail transfers under $1,000, the share becomes 80%, more than any other region.” 

Source: Chainalysis

With P2P exchanges clocking 6% of the entire crypto transaction volume in Sub-Saharan Africa, they are a fundamental part of the ecosystem. This is double that of the Central & Southern Asia and Oceania region, which comes second.

Source: Chainalysis

Creativity played an instrumental role in enabling leading P2P platforms like Paxful set foot on African soil. For instance, connecting Chinese and Nigerian gamers with gift cards.

Ray Youssef, the Paxful CEO, added:

“We had to get Bitcoin into Africa, which was difficult because it’s so hard to get money out of Africa. We needed a clever hack to make that happen. That hack ended up being gift cards.That got Bitcoin into Nigeria, and then the rest of Western Africa.”

Meanwhile, crypto exchange Binance recently launched a crypto education tour in five French-speaking countries to propel blockchain adoption and financial accessibility, Blockchain.News reported. 

Image source: Shutterstock


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Bitfinex Launches P2P Video Chat App Keet alongside Tether

Blockchain startups Bitfinex and Tether have launched a Peer-2-Peer (P2P) video calling application dubbed Keet, a product that was spawned over the past five years in collaboration with P2P infrastructure developer Hypercore.


The launch of Keet by the trio was through the startup they co-founded dubbed Holepunch.

The Keet app, which is currently closed sourced and in Alpha, is a direct competitor to Google, Zoom and other major social media and networking platforms. While working in a decentralised environment, enabling users to schedule audio and video calls, send text chat and share files for free.

The shared files are encrypted, and the entire application is powered by a new technology dubbed Distributed Holepunching (DHT). This new DHT tech permits users to locate and connect to each other “using only cryptographic key pairs upon authorisation.

With the Web3.0 ecosystem expanding by the day, projects and teams now find the need to connect with one another, and the majority of this is done via big tech giants that monetise users’ data. With Keet, Hypercore is convinced that the narratives will be changed, and communications can now be done without any hindrance.

“So what we have been working towards is to create a platform that would allow users to access applications that are unstoppable and provide freedom of speech,” said Paolo Ardoino, CTO of Bitfinex and Tether and the Chief Strategy Officer of Holepunch.

“In many places around the world, freedom of speech is extremely more limited than what we are used to say in the US or the UK. And freedom of speech is not just going to sit there and say whatever you want, but it’s like sharing and talking with the people you want all the time without having concerns that big tech is listening to you or using your data, is collecting your data, and potentially either monetising your data or using that against you.”

With about $10 million committed to building Keet and Holepunch thus far, Bitfinex and Tether’s efforts mimic those of Bluesky and the Lens Protocol from Aave founder Stani Kulechov.

Image source: Shutterstock


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Paxful Joins Hands with iProov, Providing Identity Verification

Paxful, a leading peer-to-peer (P2P) crypto trading platform, has selected iProov to provide service to verify user identity when onboarding and making transactions.

Based on Paxful’s objective of offering significant access to crypto, the partnership with iProov will be a stepping stone toward a more secure user experience. 

George Georgiades, Paxful’s chief compliance officer, pointed out:

“We need to ensure we provide the highest level of security and peace of mind to users. iProov’s technology allows us to safeguard against fraud and theft for our community while ensuring continued access and growth of the platform.”

As a reputable online facial biometric authentication company, iProov uses Liveness Assurance technology to authenticate that the online user is the right person and not an imposter. 

The partnership will enable Paxful users to carry out accurate face verifications when undertaking a transaction because a brief face authentication is required instead of a one-time passcode (OTP) or password. 

Andrew Bud, iProov’s CEO, stated:

“With the tremendous influx of new users into the crypto space comes an even greater invasion of fraudsters looking to empty or take over accounts or even hold them for ransom.” 

Furthermore, iProov will make new Paxful users’ onboarding seamless as more people continue eyeing the crypto space. Bud added:

“Paxful’s mission is a critical one that helps connect the underbanked and unbanked around the globe to financial opportunities and stability. We are delighted to support them in offering inclusive and secure remote verification measures to protect their users.”

To expand its mission of providing financial inclusion to the unbanked and underbanked, Paxful launched its first crypto debit card in 2020.  

Image source: Shutterstock


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LocalBitcoins Clocks 300,000 Mobile App Downloads, With Africa Making a Mark

After reaching 200,000 mobile app downloads on iOS and Android in two months, LocalBitcoins has scaled the heights by crossing the 300,000 mark.

The world’s leading peer-to-peer (P2P) Bitcoin marketplace is now available in 23 different languages after adding three more. “The latest additions being Arabic, Chinese and Japanese. This continues to demonstrate our commitment to delivering easy and inclusive access to cryptos for every single person around the world in a compliant and secure manner,” Jukka Blomberg, the chief marketing officer at LocalBitcoins, said.

LocalBitcoins seeks to offer more inclusion. Blomberg believes the firm’s mobile app is witnessing significant adoption in Africa. He noted:

“The adoption of the LocalBitcoins mobile app, especially in Africa, has been truly amazing. Bitcoin means inclusion and LocalBitcoins is committed to bringing Bitcoin to the next billion users in Africa and beyond, in both a compliant and secure manner.”

P2P platforms have been pivotal in increasing crypto adoption across the African continent. For example, in July 2021, Africa recorded the largest Bitcoin P2P volume growth because youths across the continent were taking up the mantle of bettering their lives and their families through cryptocurrencies

In late January, LocalBitcoins hit a new milestone after its mobile app downloads surpassed 200,000, just a few months after being launched on iOS and Android. 

Based on the company’s primary objective of rendering financial inclusion to people across the globe when it comes to buying, storing, and transferring Bitcoin in a secure, fast, and easy way, the mobile application route is touted as an ideal stepping stone. 

Image source: Shutterstock


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LocalBitcoins Cuts Fees to Zero for Ukrainians Both Locally and Abroad

To ease transactions amongst Ukrainians as they face the Russian Army Invasion in their nation, the world’s leading peer-to-peer Bitcoin marketplace, LocalBitcoins, has removed all fees for them both locally and abroad.

Based on its primary objective of rendering freedom, the firm’s CMO, Jukka Blomberg, acknowledged that this decision was reached as Ukrainians face unprecedented times of war. He added:

“LocalBitcoins’ core value is freedom. We understand that at the moment, Ukraine is facing extremely challenging times. For this reason, LocalBitcoins has removed all fees from its Ukrainian users.”

Therefore, this revelation means that Ukrainians will have a free BTC wallet that they can use to exchange their national currency, the hryvnia, at zero rates. 

The crypto community has also shown its lending hand by donating crypto worth more than $30 million to aid humanitarian efforts. 

Some of the notable faces in the crypto space that have channelled their funds to support the Ukrainian humanitarian crisis include Binance, the world’s largest cryptocurrency exchange, with a $10 million donation. 

The funds were to be split between top non-profit organizations with whom Binance had prior partnerships like People in Need, UN Refugee Agency, UNHCR, iSans, and UNICEF.

Furthermore, Canada-based crypto exchange CoinSmart had raised funds to the tune of $19 million to support the people of Ukraine and assist the international community in alleviating their immense suffering.

CoinSmart is among six crypto platforms registered as a securities dealer and market by the Ontario Securities Commission. The others include Wealthsimple, Coinberry, Netcoins, Fidelity, and Bitbuy.

The gesture by LocalBitcoins is a welcome move for Ukrainians because it recently hit a new milestone of surpassing 200,000 mobile app downloads. 

Image source: Shutterstock


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Crypto firms ignore Africa at their peril as continent set for major adoption

Even though the digital asset market seems to be witnessing a bit of a lull at the moment, the adoption of crypto-centric tech has continued to move forward with a full head of steam globally. Africa, in particular, is a continent where a growing list of mainstream financial entities have continued to make their presence felt, as they have begun to realize that the economic opportunities presented by the region are immense.

To put things into perspective, a recent report released by Singapore-based crypto data provider Triple A shows that the North African country of Morocco currently boasts one of the largest crypto populations in the region at nearly 2.5%. The kingdom currently leading many prominent countries in terms of daily Bitcoin (BTC) trades, trailing only behind Saudi Arabia across the entirety of the Middle East and North Africa (MENA) region, an impressive feat, to say the least.

What’s even more interesting is that Morocco’s existing legislative framework is largely anti-crypto, with the country’s Foreign Exchange Office giving no indication of softening its stance anytime in the near future. Despite these stringent regulations, people across the region have continued to find means such as peer-to-peer (P2P) and over-the-counter trading through which to make inroads into this rapidly-evolving ecosystem.

Crypto firms entering Africa at unprecedented rate

Emmanuel Babalola, the Africa director for cryptocurrency exchange Binance, told Cointelegraph that with each passing month, the number of cross-collaborations taking place between local blockchain/crypto firms and various mainstream entities has continued to grow. Babalola said that most forward-looking tech companies are vying to gain exposure within the region, all while trying to help people across the continent embrace and realize the true utility of blockchain. 

He further pointed out that Binance has recently partnered with the Confederation of African Football (AFCON) to sponsor the TotalEnergies African Cup of Nations tournament, a move which he sees as a small step toward a grander scheme, adding:

“The AFCON sponsorship was a very exciting one. Football is the most popular sport in Africa, one that unites the entire continent and so, sponsoring the biggest football tournament in Africa was honestly a no-brainer. It corroborates our mission to take crypto mainstream across the continent.”

Staying in line with his company’s ideal of widespread crypto adoption across the African landscape, he also pointed out that Binance recently collaborated with some of the stars participating in this year’s iteration of Big Brother Naija (Nigeria) — the biggest reality show on the continent — to help bring crypto education to a wider mainstream audience. “We are [even] sponsoring Nigerian Idol — the Nigerian version of a popular singing contest,” he added.

Lastly, Babalola noted that in recent months, many unprecedented happenings have taken place across the global crypto ecosystem such as countries like El Salvador adopting Bitcoin as legal tender — something he believes was totally unfathomable just a few years ago — and thus it would not be surprising to see African nations follow suit:

“I think this is only the beginning of things to come. In general, as institutional interest in cryptocurrencies continues to rise, more mainstream entities making their way into the region is inevitable.”

Crypto can help redefine business across Africa

When asked about the continued growth of crypto across Africa, especially within the northern part of the continent, Adedayo Adebajo, Africa director for Jelurida, a blockchain software company that develops and maintains the Nxt and Ardor blockchains, told Cointelegraph that a vast majority of African countries like to consider themselves as one bloc, rather than being divided into regional categories.

In this regard, he noted that one aspect that has united most people living in Africa is their lack of tangible business opportunities, as well as a clear lack of access to high-quality banking alternatives that they can use to send and receive funds from across the globe. Adebajo added:

“African nations believed they were left out of the first three industrial revolutions. The 4IR (fourth industrial revolution) technology including blockchain and cryptocurrency has, for the first time in history, provided them with an opportunity to participate in making history. Most governments in the continent are now open to capacity building and localizing solution developments, among others. To do so, their doors remain wide open to foreign offers that will get them closer to their aim.”

When asked about the challenges that may arise as a result of most nations in the continent (especially those located across North Africa) adhering to an Islamic way of life, Adebajo noted that the key issue preventing crypto-based banking services from reaching the masses is not religion but a clear lack of understanding of what the technology brings to the table. 

“As Muslims, we have learned from quotable religious scholars that we are not excluded from using crypto or participating in its offerings, although this stance may perhaps remain debatable,” he added.

Related: Indonesia’s national Islamic council reportedly declares Bitcoin haram

Blockchain-based banking solution

Africa’s vast geographic size compounded by the presence of many small economies across the continent has led to many nations struggling with systematic infrastructure development, especially when it comes to financial services, something that has resulted in 57% of the continent’s population remaining unbanked. 

RJ Katunda, co-founder of African project World Mobile, a Cardano-based mobile network, told Cointelegraph that over the years, Africans have gradually become accustomed to using innovative payment systems such as Kenya’s M-Pesa.

However, he pointed out that there are now newer blockchain-based alternatives beginning to emerge, setting the context for crypto and digital currencies that offer a more convenient and direct P2P channel for remittance payments, international commerce and savings. He added:

“With many economies growing rapidly, crypto and blockchain-based projects will continue to enter Africa, where their proposition is relevant and where they can form partnerships with local entities. While many individuals use cryptocurrency in Africa, legislation in many countries lags. As in other jurisdictions, cryptocurrencies don’t fit within current regulatory frameworks.”

In essence, Katunda believes that the core issue preventing widespread adoption of crypto-tech (especially from a financial standpoint) across the region is a lack of perceived central control from many governments, which creates difficulties for authorities to oversee and mitigate bad practices. “However, many governments have announced that they are working on regulatory frameworks to emerge in the near future,” he closed out by saying.

Africa cannot be ignored any longer

Akin Jones, a partner at Gluwa Capital, an Africa-based investment fund focused exclusively on fintech lenders using blockchain technology, told Cointelegraph that Africa’s growing population and adoption of cryptocurrency mean that companies ignoring the continent are either not serious about the technology in the long term or have failed to realize the massive financial proposition currently in front of them.

In Jones’ view, Bitcoin could very well become legal tender across many African nations since most of these countries already find it quite hard to trade with each other because of constant currency fluctuations. Talking about North Africa in particular, he further opined that since the region serves as a bridge between Europe and sub-Saharan Africa, it would make a lot of sense for fintech firms to consider making inroads there, adding:

“Identity management, land ownership and insurance are three key areas that could be improved on across North Africa which could help change the perception in the region. CBDCs [central bank digital currencies] could also help ease the acceptance of cryptocurrency in this regard.”

Thus, it will be interesting to see how things shape out for the continent from here on out, especially since many of the nations within the region are known to suffer from an extremely high level of red tape. With many governments fast realizing the potential that crypto and blockchain possess, however, it would not be surprising to see countries making way for more foreign investment from established firms operating within this rapidly maturing sector.