The CBN further warned Nigerians against investing in crypto currencies as doing so would be at their own risk.

The CBN had on January 12, 2017 issued a circular to banks and other financial institutions on virtual currency operations in Nigeria.

The cautionary words were made by the Apex Bank’s Acting Director, Corporate Communications, Mr Isaac Okoroafor, in a statement he issued on Wednesday in Abuja.

According to him, crypto currencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, and Exchanges such as NairaEx were not licensed or regulated by the CBN.

Okoroafor said that dealers and investors in any kind of crypto currency in Nigeria were not protected by law, thus may be unable to seek legal redress in event of failure of the exchangers or collapse of the business.

In the circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, the CBN had among other issues noted that virtual currencies were traded in exchange platforms that were not regulated all over the world.

Amugo further noted that transactions in virtual transactions were largely untraceable and anonymous, thereby, making them susceptible to abuse by criminals in money laundering and financing of terrorism.

In February 2018, the World Bank had compared cryptocurrencies to “Ponzi schemes,” – a cautionary comparison that further raises questions about the legitimacy of digital currencies such as Bitcoin.

In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of cryptocurrencies are basically Ponzi schemes,” Bloomberg quoted the World Bank Group President Jim Yong Kim as saying this on Wednesday, February 8, at an event in Washington.

“It’s still not really clear how it’s going to work.”