In a landmark ruling, the Nigerian Federal High Court in Abuja has convicted two Nigerian crypto firms. The convicts, Egomsinachi Road Autos Limited and Chimera Log & Haulage Services Limited were accused of unlicensed USDT-to-Naira transactions.
According to Nairametrics, this conviction was handed down by Justice Joyce AbdulMalik on Thursday. This development is part of a continued crackdown by the Economic and Financial Crimes Commission (EFCC) against unauthorized crypto activities.
The Charges: Unlicensed Crypto Trading and Non-Compliance
The defendants were found guilty of engaging in unlicensed trading of USDT (Tether) against the Naira, an unauthorized practice in the country. Under Nigerian financial regulations, entities conducting such transactions must comply with reporting requirements under the Money Laundering (Prevention & Prohibition) Act of 2022.
Specifically, businesses involved in crypto trading are required to report their financial activities to the Special Control Unit on Money Laundering (SCUML). The defendants, however, failed to meet these compliance standards.
The EFCC’s investigation found that the firms had been operating outside the legal framework of the Nigeria Autonomous Foreign Exchange Market (NAFEM). These findings made their activities illegal.
Plea Deal and Its Consequences
Chukwubuka Felix Ogumba, director of both firms, pleaded guilty to the charges, which set the stage for a plea bargain agreement with the EFCC. Under the plea agreement, the defendants were required to forfeit N50 million, equivalent to $30,000 to the EFCC’s recovery account. Each company also faced a N500,000 fine, payable to the federal government for conducting illegal financial activities.
The court confirmed that the deal was entered into voluntarily, with legal counsel for Ogumba urging the court to ratify the agreement. After ensuring that Ogumba had willingly agreed to the terms, Justice AbdulMalik ratified the arrangement. The court also mandated that Ogumba submit an affidavit of good behavior before the court as part of his compliance.
In a related development, the Nigerian government has recently dropped money laundering charges against Binance executive Tigran Gambaryan. He was recently released after spending several months in detention earlier this year, thanks to President Biden’s involvement.
The EFCC’s Ongoing Battle Against Illegal Crypto Trading
This conviction is the third such ruling related to illegal crypto trading in recent weeks. Prior to this, another crypto firm, Official Gredo, faced similar charges and penalties.
The EFCC’s investigation is part of a larger effort to identify and prosecute those engaged in unauthorized USDT-to-Naira transactions. The EFCC has flagged it as a method of laundering illicit funds and manipulating the exchange rate.
The Nigerian government’s strict crypto stance aims to regulate the sector and curb illegal activities, reflecting a global trend. Companies like Paparaxy Global Ventures and Lemskin Technologies were previously ordered to refund millions of Naira for similar offenses.
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