Despite several warnings by the Nigerian finance regulator
against Bitcoin, world known cryptocurrency,investors globally are
now getting their fingers burnt, as it continued to crash, checks
by our reporter have showed.
After the bitcoin craze rose to a near-fever pitch in 2017,
several investors and analysts this year, are predicting more
growing pains for cryptocurrencies over surge in speculations and
government placing ban.
Interestingly, as bitcoin price has stagnated in the last two
weeks, smaller digital currencies such as ripple, stellar and tron
have surged into the ranks of the largest cryptocurrencies by
market capitalization.
Bitcoin saw its highest value before the Christmas holidays when
it reached the staggering price of just below $20,000, but valued
at $14,815.88 as at last week, according to CoinDesk.
Checks showed that one bitcoin equals an estimated N6 million as
at January 5, 2018 as more Nigerian youths on MMM are taking
interest in investing in virtual currencies, bitcoin
specifically.
In January 2017, the Central Bank of Nigeria (CBN) warned
Nigerians and financial institutions to stay away from virtual
currencies that have attracted investment in payments
infrastructure that provides new methods for transmitting value
over the internet.
The CBN had reiterated that virtual currencies such as bitcoin,
ripples, monero, litecoin, degecion, onecoin among similar products
are not legal lenders in Nigeria, thus any financial institution
transacts in such businesses does so at its risk.
Last year, key market regulating bodies, CBN, Securities and
Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation
(NDIC) were increasingly vocal in warning investors about the risks
of cryptocurrencies.
For instance, the CBN said virtual currencies are largely used
in terrorism financing and money laundering, considering the
anonymity of virtual transactions.
The Director, Financial Policy and Regulation Department, CBN,
Mr. Kevin Amugo in a signed document said, transactions in virtual
currency are largely untraceable and anonymous making them
susceptible to abuse by criminals, especially in money laundering
and financing of terrorism.
“Virtual currencies are traded in exchange platforms that are
unregulated, all over the world. Consumers may there lose their
money without any legal redress in the event these exchangers
collapse or close businesses.
“The attention of bank and other financial institutions is
hereby drawn to the above risks; and you are required to take the
following actions pending substantive regulation or decision by the
CBN,” the statement read.
According to him, actions needed to take by financial
institutions include, “Ensure that you do not use, hold, trade
and/or transact in any way in virtual currencies. “Ensure that
existing customers that are virtual currency exchangers have
effective capital AML/CFT controls that enable them to comply with
customer identification, verification and transfer, monitoring
requirements.
“Where banks or other financial institutions are not satisfied
with the controls put in place by the virtual currency
exchanger/customers, the relationship should be discontinued
immediately.
“Any suspicious transactions by these customers should
immediately be reported to the Nigerian Finance Intelligence Unit
(NFIU).”
The apex bank said anyone trading in bitcoin is doing so at his
or her own risk.
However, financial experts have joined regulating bodies to
discouraged investors to buy and trade with bitcoin due to its
incredible volatility. Most of them are of the opinion that it is a
bubble ready to burst this year.
They expressed that as governments tighten their grip, bitcoin
prices will most likely fall, and perhaps collapse, though the
timing is impossible to judge. Bitcoin seems too prone to illicit
use and too vulnerable to government regulation to survive for the
long- term.
They hinted that, “contrary to the attestation of its
proponents, bitcoin contains several flaws that foretell its
eventual doom.
“The crux of his argument is that once central banks begin to
view bitcoin as a credible threat, governments will declare war on
cryptocurrency and suppress it out of existence through hostile
regulatory policies.”
One of the most highly-regarded economists in the US said that
he believes the bitcoin price is in a bubble and will “likely
burst” over the long-term, even if it continues to appreciate in
the short-term.
Bitcoin was the best performing currency last year. It has
appreciated from four cents in 2010 to over $19,000 in 2017.
On January 8, 2017 when MMM Nigeria announced its planned
comeback, it introduced bitcoin as a mode of payment.
Prior to the freeze of MMM, participants were allowed to provide
help in bitcoin, but they were paid back in naira. However, the new
plan allows participants to receive payment in bitcoin, and watch
their monies grow in bitcoin.
“Due to the recent sharp price fluctuations of Bitcoin,
MAVRO-BTC is being introduced in the system,” MMM said.
“So far, we have only had Mavro-Naira in the System. Even though
you provided help via Bitcoin, your Bitcoins, anyway, were
recalculated into the Nigerian Naira at the exchange rate at the
moment of providing help, and you were credited with Mavro-Naira in
your PO.
“It was the naira amount that grew. In other words you received
30per cent a month specifically in the naira (not in Bitcoins,
although you originally provided help using Bitcoins). Now, you
have a chance to have 30per cent growth of the Bitcoin amount, not
the naira amount.
“So, acquire MAVRO-BTC which will be credited in your PO and
will grow at a 30 per cent monthly growth rate. In a month not only
30 per cent will be added to your initial amount, but it can
increase itself due to Bitcoin price growth.”
Notwithstanding, Deputy Director, Banking and Payments System,
CBN, Mr. Musa Itopa-Jimoh had explained that apex bank has never
wanted to stop bitcoin usage in Nigeria.
According to him, “We have never been issuing authority for
bitcoin. It’s not our currency. We neither control nor issue
bitcoin. What we do is only caution Nigerians.” He also added that
if they really participated in cryptocurrencies, they cannot come
to the CBN for consumer protection it cannot control bitcoin.
“Plenty of people just misinterpreted the fact that we desired
to bring bitcoin to an end. We can never stop bitcoin. Bitcoin is
not an invention of 2016. So, how can the Central Bank of Nigeria,
not central bank of the world, stop the running and implementation
of bitcoin?” he said.
Moreover, he emphasized the fact that all the CBN has been
merely threatening Nigerians when either investing in digital
currencies or dealing with them since the CBN has no abilities to
control any virtual money.
Despite several warnings by the Nigerian finance regulator
against Bitcoin, world known cryptocurrency,investors globally are
now getting their fingers burnt, as it continued to crash, checks
by our reporter have showed.
After the bitcoin craze rose to a near-fever pitch in 2017,
several investors and analysts this year, are predicting more
growing pains for cryptocurrencies over surge in speculations and
government placing ban.
Interestingly, as bitcoin price has stagnated in the last two
weeks, smaller digital currencies such as ripple, stellar and tron
have surged into the ranks of the largest cryptocurrencies by
market capitalization.
Bitcoin saw its highest value before the Christmas holidays when
it reached the staggering price of just below $20,000, but valued
at $14,815.88 as at last week, according to CoinDesk.
Checks showed that one bitcoin equals an estimated N6 million as
at January 5, 2018 as more Nigerian youths on MMM are taking
interest in investing in virtual currencies, bitcoin
specifically.
In January 2017, the Central Bank of Nigeria (CBN) warned
Nigerians and financial institutions to stay away from virtual
currencies that have attracted investment in payments
infrastructure that provides new methods for transmitting value
over the internet.
The CBN had reiterated that virtual currencies such as bitcoin,
ripples, monero, litecoin, degecion, onecoin among similar products
are not legal lenders in Nigeria, thus any financial institution
transacts in such businesses does so at its risk.
Last year, key market regulating bodies, CBN, Securities and
Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation
(NDIC) were increasingly vocal in warning investors about the risks
of cryptocurrencies.
For instance, the CBN said virtual currencies are largely used
in terrorism financing and money laundering, considering the
anonymity of virtual transactions.
The Director, Financial Policy and Regulation Department, CBN,
Mr. Kevin Amugo in a signed document said, transactions in virtual
currency are largely untraceable and anonymous making them
susceptible to abuse by criminals, especially in money laundering
and financing of terrorism.
“Virtual currencies are traded in exchange platforms that are
unregulated, all over the world. Consumers may there lose their
money without any legal redress in the event these exchangers
collapse or close businesses.
“The attention of bank and other financial institutions is
hereby drawn to the above risks; and you are required to take the
following actions pending substantive regulation or decision by the
CBN,” the statement read.
According to him, actions needed to take by financial
institutions include, “Ensure that you do not use, hold, trade
and/or transact in any way in virtual currencies. “Ensure that
existing customers that are virtual currency exchangers have
effective capital AML/CFT controls that enable them to comply with
customer identification, verification and transfer, monitoring
requirements.
“Where banks or other financial institutions are not satisfied
with the controls put in place by the virtual currency
exchanger/customers, the relationship should be discontinued
immediately.
“Any suspicious transactions by these customers should
immediately be reported to the Nigerian Finance Intelligence Unit
(NFIU).”
The apex bank said anyone trading in bitcoin is doing so at his
or her own risk.
However, financial experts have joined regulating bodies to
discouraged investors to buy and trade with bitcoin due to its
incredible volatility. Most of them are of the opinion that it is a
bubble ready to burst this year.
They expressed that as governments tighten their grip, bitcoin
prices will most likely fall, and perhaps collapse, though the
timing is impossible to judge. Bitcoin seems too prone to illicit
use and too vulnerable to government regulation to survive for the
long- term.
They hinted that, “contrary to the attestation of its
proponents, bitcoin contains several flaws that foretell its
eventual doom.
“The crux of his argument is that once central banks begin to
view bitcoin as a credible threat, governments will declare war on
cryptocurrency and suppress it out of existence through hostile
regulatory policies.”
One of the most highly-regarded economists in the US said that
he believes the bitcoin price is in a bubble and will “likely
burst” over the long-term, even if it continues to appreciate in
the short-term.
Bitcoin was the best performing currency last year. It has
appreciated from four cents in 2010 to over $19,000 in 2017.
On January 8, 2017 when MMM Nigeria announced its planned
comeback, it introduced bitcoin as a mode of payment.
Prior to the freeze of MMM, participants were allowed to provide
help in bitcoin, but they were paid back in naira. However, the new
plan allows participants to receive payment in bitcoin, and watch
their monies grow in bitcoin.
“Due to the recent sharp price fluctuations of Bitcoin,
MAVRO-BTC is being introduced in the system,” MMM said.
“So far, we have only had Mavro-Naira in the System. Even though
you provided help via Bitcoin, your Bitcoins, anyway, were
recalculated into the Nigerian Naira at the exchange rate at the
moment of providing help, and you were credited with Mavro-Naira in
your PO.
“It was the naira amount that grew. In other words you received
30per cent a month specifically in the naira (not in Bitcoins,
although you originally provided help using Bitcoins). Now, you
have a chance to have 30per cent growth of the Bitcoin amount, not
the naira amount.
“So, acquire MAVRO-BTC which will be credited in your PO and
will grow at a 30 per cent monthly growth rate. In a month not only
30 per cent will be added to your initial amount, but it can
increase itself due to Bitcoin price growth.”
Notwithstanding, Deputy Director, Banking and Payments System,
CBN, Mr. Musa Itopa-Jimoh had explained that apex bank has never
wanted to stop bitcoin usage in Nigeria.
According to him, “We have never been issuing authority for
bitcoin. It’s not our currency. We neither control nor issue
bitcoin. What we do is only caution Nigerians.” He also added that
if they really participated in cryptocurrencies, they cannot come
to the CBN for consumer protection it cannot control bitcoin.
“Plenty of people just misinterpreted the fact that we desired
to bring bitcoin to an end. We can never stop bitcoin. Bitcoin is
not an invention of 2016. So, how can the Central Bank of Nigeria,
not central bank of the world, stop the running and implementation
of bitcoin?” he said.
Moreover, he emphasized the fact that all the CBN has been
merely threatening Nigerians when either investing in digital
currencies or dealing with them since the CBN has no abilities to
control any virtual money.
Read more https://nairalaw.com/bitcoin-crashes-as-investors-count-loses-on-investments/