Nigeria: Financial Watchdog Receives Petition Against Crypto Exchange Over Account Closures

Published at: April 8, 2019

Estonia-based crypto firm Paxful Inc. has been accused of defrauding thousands of Nigerian investors out of millions of dollars worth of cryptocurrencies through allegedly arbitrary account closures.

The news was reported by local media agency Punch on April 7.

According to the report, the Nigerian non-profit organization United Global Resolve for Peace (UGRP) filed a petition on April 2 with the country’s financial watchdog, the Economic and Financial Crimes Commission (EFCC), which outlines Paxful’s Inc.’s alleged malign practices and their impact on its Nigerian client base.

Signed by UGRP executive director Shalom Olaseni, the petition alleges that:

“Cryptocurrency trading and exchange platform, ‘https://paxful.com’ has been ripping them of their life investment in cryptocurrency by suspending their accounts, deactivating their wallets and refusing to return the value in their accounts to them even after investigation and finding that they were not involved in any fraudulent activities.”

The petition accuses the company of “willful disregard for contract and rules of commercial transaction” in failing to reactivate access to user funds even after purported investigations were found to be groundless.

The petition further claims that Paxful generated $20 million in profit via the exchange in 2018, with Nigerian customers purported to have provided for 40% of the revenue from trades in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and other cryptocurrencies.

One purported victim, Samuel Olanrewaju, told Punch news he had lost access to three BTC (worth ~$15,750 to press time) since November 2018, claiming the firm had falsely accused him of creating a fake user profile, and refused to respond to his queries thereafter.

Paxful has for its part firmly denied its account and wallet closures have been arbitrary, claiming in an email to Punch that “all accounts that have been shut down have a reason for it. We will not shut down any account unless they violate our TOS (Terms of Service).”

Acting EFCC spokesman Tony Orilade confirmed with the news outlet that the watchdog had received the petition and would investigate the allegations.

In March of last year, the Nigeria Deposit Insurance Corporation (NDIC) warned Nigerian citizens against the use of cryptocurrencies, noting they are not authorized by Nigeria’s central bank and consequently not insured by the NDIC.

Tags
Bitcoin
Ethereum
Cryptocurrencies
Crimes
Scams
Nigeria
Litecoin
Related Posts
Chinese Police Dismantle $14M Crypto Scam
The Chinese authorities dismantled a significant crypto-related scam in Wenzhou. The scheme amassed over 100 million yuan ($14.31 million), which was seized along with a number of luxury cars and villas. According to Toutiao, the gang has been operating since 2019 and primarily sought out victims through Telegram chat groups, including one called “Huobi Global Moving Brick Arbitrage HT Chinese Group Community.” ETH, BTC, and USDT stolen from victims The report states the scammers pretended to be investors who had benefited from an “investment scheme.” The scammers told their victims that all they had to do was send their cryptos …
Bitcoin / July 9, 2020
Myanmar’s Central Bank Warns Public Not to Use Crypto After Series of Scams Reported
The Central Bank of Myanmar has urged consumers to stop trading cryptocurrencies amid fears that inexperienced users could lose money, Southeast Asian news outlet The Irrawaddy reported on May 3. In a statement obtained by the website, the central bank said it had received reports of several scams targeting those who lack understanding about virtual currencies. Authorities in Myanmar, also known as Burma, say the likes of bitcoin (BTC,) ether (ETH) and litecoin (LTC) are being traded in the country through Facebook profiles as well as websites. According to the report, the central bank has stressed that the use of …
Blockchain / May 3, 2019
Crypto Scammers Turn Toward Terrorism With a Japanese Bomb Threat
Crypto terrorists threatened to bomb a government office on the Japanese island of Hokkaido. They told authorities that they would only disable the alleged explosive device if their crypto ransom was paid. According to FNN, the terrorists sent the Numata Town Hall an email stating they had installed a bomb in a women’s second-floor toilet. They claimed that as long as officials met their payment demands before 03:00 UTC on June 29, the bomb would not be detonated. However, this appears to have been a fake threat. The deadline set by the criminals has passed and the hall remains intact …
Bitcoin / July 29, 2020
AMFEIX Threatens Users Who Share Coverage That Criticizes the Company
Last week Cointelegraph published a story about investors having difficulty getting their money back from a crypto fund called AMFEIX, which promised high-yield profits for investors who sent them Bitcoin (BTC). Our story described more than 500 pending withdrawals from users trying to get their money back, and AMFEIX’s unsatisfactory communication with those users. The company addressed its users via its official Telegram channel after the story was published, suggesting that the withdrawal delays were due to technical difficulties that had been an issue since May. It also stated that “members who show loyalty to AMFEIX will have priority” in …
Bitcoin / July 28, 2020
Bobby Lee, ‘BTC Maximalist’: Bitcoin’s Value Is in the Eye of the Beholder
This interview has been edited and condensed. Recently at BlockShow Europe 2018, Cointelegraph got the chance to speak to Bobby Lee — co-founder of Chinese crypto exchange BTCC and a board member at the Bitcoin Foundation — about what he’s been up to in the crypto space since BTCC shut down last fall. Molly Jane: In the past few months, Chinese crypto regulations have steadily been increasing, from the ICO ban in the fall of last year, the January ban of “exchange-like services,” and the February ban of foreign exchanges. With your experience working in China in mind, do you …
Bitcoin / June 21, 2018