Update for Nigerian crypto users from Luno CEO, Marcus Swanepoel
Dear friends & customers in Nigeria
I know there’s still a lot of uncertainty and frustration due to recent local crypto developments and I wanted to personally shed some more light on it.
We’ve been the leading crypto company in Nigeria for over five years now, giving millions of Nigerians the opportunity to become part of the new crypto economy.
You’ve seen us on billboards across Lagos, we’ve run tons of events, and we are taking steps to work with regulatory bodies to help create a pragmatic regulatory framework to support crypto in Nigeria.
As many of you will know, on 5 February, the Central Bank of Nigeria (CBN) announced that all banks and payment service providers should stop supporting crypto companies. This has meant customers of Luno (and other cryptocurrency platforms) have since been unable to withdraw or deposit funds.
To be clear, it’s not Luno blocking your money. Local Nigerian banks process deposits and withdrawals on our behalf. Until the banks and payment providers are authorized to work with crypto platforms again, we cannot process withdrawals and deposits through them.
This doesn’t mean there aren’t options, and we are actively working towards a solution. We’re evaluating every option very closely to make sure we don’t impact the industry negatively or put our customers and their funds at risk. Luno has over 3 million customers in Nigeria, and we need to put their interests first.
Peer-to-peer (P2P) systems, for example, have been widely discussed as an alternative to release these funds. However, P2P trading comes with risks to consumers from scammers and also offloads our regulatory risks onto you, our customers. We want to make sure these risks are much lower. We don’t want regulators to come after our customers for transgressing any laws. We want to make sure you can buy and sell cryptocurrency just as safely and easily as before.
Our customers rightly want to be able to withdraw their money and I can assure you we’re working round the clock to make that happen. So what are we doing to change things?
- We are negotiating day and night with the relevant stakeholders in Nigeria to get them to collectively work with the government to find a solution that works for everyone. This includes the CBN and other crypto platforms, and allowing people to withdraw is the main priority.
- We’ve intensified our regulatory lobbying, sharing our significant expertise and experience in dealing with regulators around the globe to bring pragmatic regulations to the NG market. This includes the SEC, who have been more positive in the past and even released a position paper in 2020.
- We’ve been working with payment processors to find alternative ways to return naira back to customers.
These are not necessarily overnight fixes, but I do know we will eventually get it resolved. Why? Firstly, because crypto is becoming so strategically important for every country – in the long run, no one can afford to ban it. But more practically, because we have been here before.
As some of you may remember, in February 2017 Luno’s bank account was frozen by the authorities. It took 4 months, but eventually, we regained access and secured the right outcome for our customers. Our team never gave up and Luno and our customers emerged stronger than before.
In Malaysia, regulatory uncertainty also resulted in the blocking of customers’ funds for many months. We worked with the government and Malaysia ended up with a fully regulated crypto market, where we are now the only major company operating under that license. In the end, with a lot of effort by our team on the ground, everything was resolved, everyone was happy, and the market is thriving – not just for Luno, but also other crypto companies. Malaysia went from no withdrawals to being one of the most forward-looking countries in the world when it comes to crypto. But it took time.
I wish we could get these results overnight in Nigeria, but as you know, these things can take time, especially when it’s such a political and emotive issue. We move incredibly fast internally, but unfortunately, many things that need to happen are not controlled by us. Both our local Nigerian team and our global team across multiple offices are trying their best to push things forward as quickly as is humanly possible given the circumstances.
What I can say is that we always end up with positive outcomes for our customers. And while many of you will be very upset about the experience, please also know that Luno is the only crypto company in the world with a track record to resolve these issues. We’re not just saying it, we’ve done it before in other countries, and we’re going to do it again in Nigeria.
As mentioned many times before, we are in it for the long run. When the dust has settled, you will see many crypto companies leave Nigeria or be asked to stop operating because they are not licensed properly, and your capital will be at risk again – but Luno will still be there for you and your families.
We are going to come out of this stronger Nigeria. If I know one thing from my friends in Nigeria, it’s that you’re a resilient bunch, and together we’re going to do this. There is light at the end of the tunnel. Please support us in helping all of us get there.
In the meantime, rest assured that we are exploring all the options at our disposal to ensure we give you, our customers, access to your money.
Invitation to CoinDesk Crypto State 2021
We’d like to extend an invitation to CoinDesk’s Crypto State event on 8 July 2021, where leading experts will discuss the impact of the CBN ban and what a regulatory future might look like. We hope the event will offer clarity on the current crypto landscape in Nigeria and how the CBN circular has affected Nigerians. The event will commence at 5pm, Lagos time.
You’ll hear from:
- Olumide Adesina, Investment and Financial Market Analyst, FxEmpire
- Senator Ihenyen, Lead Partner, Infusion Lawyers President, Stakeholders in Blockchain Technology Association of Nigeria (IBAN) Infusion Lawyers
- Owenite Odia, Country Manager, Luno Nigeria
- Olaleye Awe, Founder, Alpha Training Lab and Crypto Trader
- Buchi Okoro, CEO and Co-Founder, Quidax