Nigeria Court Orders Arrest of Six in $620,000 Crypto Fraud

A high court in Nigeria has granted the Economic and Financial Crimes Commission (EFCC) the authority to arrest six individuals allegedly involved in investment fraud at a cryptocurrency exchange. The Federal High Court in Abuja approved the arrest and detention of these individuals, who are accused of promoting the Crypto Bridge Exchange (CBEX) and defrauding investors out of 1 billion naira, approximately $620,000. The suspects had not been arrested at the time of the report.

The EFCC's motion for the arrest stated that the defendants used their company, ST Technologies International Limited, to promote CBEX by making advertisements and luring unsuspecting members of the public to invest cryptocurrencies on the CBEX investment platform. This legal action is part of Nigeria's ongoing efforts to crack down on representatives of crypto exchanges in the country. In February 2024, Nigerian authorities detained and arrested two Binance executives who were visiting to discuss the exchange’s activities.

In April, many CBEX users began reporting that they could not withdraw their funds from the exchange, leading to online outrage that escalated into real-world violence. A group of investors stormed CBEX’s local office in Ibadan, looting items such as the air conditioning unit in an apparent attempt to recuperate some of their losses. The case against Binance is still ongoing, with a US citizen, Tigran Gambaryan, having been detained and released to US custody after eight months on tax and money laundering charges. Gambaryan's health reportedly deteriorated during his imprisonment, drawing criticism from the crypto industry and US lawmakers.

Nigeria’s tax evasion case against Binance continues to move forward, despite the exchange having no office in the country. The case highlights the regulatory challenges faced by cryptocurrency exchanges operating in Nigeria, where the government has shown a willingness to take legal action against those suspected of fraudulent activities. The situation underscores the need for greater transparency and accountability within the cryptocurrency industry, as well as the importance of adhering to regulatory standards to avoid legal repercussions.