When Omeke Anthony (not real name) moved to Lagos in 2008, after his national youth service, it was with the hope of finding a well-paying job, and finding a space in Nigeria’s commercial city’s growing elite class. But after four years of searching for a job without success and completing a masters degree programme in the University of Lagos, the Engineering graduate from the Federal University of Technology, Owerri (FUTO), decided to start a phone and accessory business, which, according to him, never really took off for want of funds.

But Omeke’s story changed when he was introduced to crypto-currency in 2015 by a banker friend. Today, he is not just a trader, but also a trainer, running an academy through which he has brought many into the trade and groomed them to become successful readers.

“I am now known as a millionaire maker,” he said. “I have helped many people to make their first millions through crypto. It’s a life changer.”

Omeke by his own admission, is now “a comfortable man,” who has gone from struggling to make a few thousands in a month to now being ‘well-to-do.’

“I started small,” he said. “Then, I could put, say N50,000 in one coin, N20,000 in another coin and so on. Gradually, they accumulated into something tangible. The best way to make money in crypto is by discovering new ones with potential and investing in them early. Sometimes, you can make returns of up to 2000 percent.”

Omeke is one of millions of Nigerians turning to crypto trade as source of income, and who have defied a ban on the trade, or more specifically, the barring of Nigeria’s commercial banks from facilitating the trade.

Crypto adoption got huge boost in the country in 2015, the same year that Ponzi scheme MMM swept across the country, eventually burning many fingers. Some MMM platforms such as MMM Global relied exclusively on cryptocurrencies, particularly Bitcoin (BTC), the pioneer crypto whose value has gone from about $1 in 2008 to over $50,000 in May 2021.

Following the collapse of the MMM Ponzi scheme, many continued to trade crypto, with adoption growing exponentially in the last six years. Last year, data gathered from leading peer-to-peer Bitcoin exchange, Paxful showed that between May 2015 and November 2020, Nigerians traded 60,215 bitcoins, valued at more than $566 million, which placed the country as the world’s second-largest Bitcoin market.

Bitcoin trade particularly had its highest spike of 30 percent last year during the national lockdown and the highest volume traded during the peak of the pandemic. Between January and September, Paxful reported a 137 percent increase in new registrations in Nigeria. The company had disclosed that Nigerians make up around a quarter of its customer base with 1.3 million registered accounts.

In October last year, at the height of the EndSARS protests that rocked the country, the Central Bank of Nigeria wielded the stick against bank accounts that received donations used to finance the protests, forcing the promoters to resort to cryptocurrencies. It was perhaps the move that rattled the country’s regulator.

On February 6 this year, the CBN issued an order banning commercial banks from facilitating Bitcoin and other cryptocurrency transactions.

“The Central of Bank of Nigeria’s (CBN) circular of January 12, 2017 ref FPR/DIR/GEN/C1R06/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the pubic so the risk associated with transactions In crypto currency refers,” a letter to deposit money banks signed by Mr. Bello Hassan, its Director of Banking Supervision had said.

“Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in crypto curencies or facilitating payments for cryptocurrency exchanges is prohibited. Accordingly, all DMBs are advised to stop facilitating such transactions.”

“NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating crypto currency exchanges within tier systems and ensure that such accounts are closed immediately. Please note that breaches of this directive will attract severe regulatory sanctions. This letter is with immediate effect.”

The Cryptocurrency ban created uncertainty in the interim. On Luno, a London-headquartered crypto startup and market leader in Nigeria, with about 3million users in the country, price of Bitcoin dropped from over N20 million to within N18 million, whilst the price was above $40,000 in the global market. On Binance, the biggest crypto exchange platform, the dollar went from N485 to N460.

“Because a lot of people were new to the crypto market, the news (of CBN ban) created panic. The dollar/ naira exchange rate dropped dramatically as a result. Globally, BTC was flying, but in naira it was not appreciating as such,” Omeke said.

“At the time, BTC was supposed to be N20 million at over $40,000, but because the naira/dollar exchange came down to N460 to the dollar, when ordinarily it’s supposed to be above N485 as it was before the circular, the naira price dropped because people panicked and stopped buying.”

The ban hit start-ups facilitating third party transactions through banks particularly hard. Their accounts were reportedly blocked, as well as those of individuals who used theirs to trade crypto.

Soon, however, the things returned to normal as traders found a way around the ban through to peer-to-peer exchange to buy and sell on Binance and other platforms such as LocalBitcoins. Indeed, according to Coin Dance, as at April this year, weekly buying and selling was regularly exceeding N1 billion ($2.6 million), comparable to the volume seen before the ban.

Peer-to-peer (P2P) exchanges, which are decentralized platforms that directly connect buyers and sellers without third parties, have thus become the favoured way to buy bitcoin.

“I used to buy and sell crypto on Luno, but following the CBN ban, I could no longer continue because I was no longer able to bring in or withdraw money from the platform. I could only buy and sell with what I already had there, unfortunately, it’s little,” Patrick Ezeugo, a trader said.

“But someone later introduced me to Binance which uses peer-to-peer, and I was able to create an account and trade. Basically, you send money to the seller’s bank account and he will release the amount of USDT you have requested to buy, then you can use it to buy coins.”

In April, two months after the CBN ban, data from analytics platform UsefulTulips, showed that there had been a 27 percent increase in peer-to-peer Bitcoin trading in the country.

Still, last week, Paxful in a similar report, said Nigeria’s cryptocurrency traded volumes on the platform topped $1.5 billion in the first four months of 2021, representing almost a third of Paxful’s global total volume of $5 billion.

The figures once again, reaffirmed Nigeria’s status as one of the exchange’s biggest markets globally, proving that the CBN ban has had little impact.

The report further noted that Nigeria’s latest total traded volume figure was generated by the platform’s approximately 1.5 million users. In total, Paxful had 6 million users globally by the end of April. In addition to Nigeria, the exchange’s other top four markets globally include the United States, China, India, and Kenya.

“Nigeria is still leading and the lead is even growing. Nigeria is further ahead since the CBN’s ban and our value has grown by 15 to 20 per cent. And it is going to continue to grow,” said Paxful CEO, Ray Youssef in an interview with journalists last week. “We have 1.5 million users here in Nigeria that has moved over $1.5 billion worth of value.

“With crypto-currencies, we see an alternative, a way to rest the financial system based on equality. Our mission at Paxful is to give everyone equal access to finance no matter who they are or where they are so they can control their own money and build the future they want with financial freedom.”

Apart from the lure of immediate and long term gains, the growing uncertainty and instability around the Nigerian naira, which has depreciated significantly within the past months in the parallel market (exchanging for N485 to the dollar at the time of writing), is another reason many are opting for crypto.

Indeed, apart from Nigeria, other African countries like Zimbabwe whose currencies have taken a beating, have seen a spike in cryptocurrency trade led by bitcoin, due to currency fluctuations and uncertain monetary policy.

“For me, it makes a lot more sense to put my money in crypto,” a banker with one of Nigeria’s new generation banks who doesn’t want his name in print said. “People talk about the volatility of the market, but in the long term, it is still much more profitable than most other investments.

“For instance, Bitcoin has gone from $35,000 in early January to $57,000 in May. In fact, at some point, it was over $60,000. So, yes, in terms of volatility, it is volatile. But when you take stock of these five months interval, you will realize that you are not losing at all.

“Obviously, due to the volatility, a short term trader can get his hands burnt, because within a relatively short period, Bitcoin can plunge more than 20 percent, but for a long time investor, if you check the trajectory of Bitcoin and other top coins, say from 2019, you will realize that it’s wise to leave your savings there.”

It’s a sentiment Omeke, who now spends much of his time teaching and researching new coins, shares.

“Remember I was telling you about a new coin, Trust Wallet Token (TWT) in February. At that time, it was $0.4, but now it has crossed the $1 barrier. Imagine that you invested then. That’s how it works.”

Asked whether he was not concerned about possible outright ban on crypto, he insisted, “No, that’s not possible. They can’t ban crypto; they cannot stop us.”

He, however, cautions that the key is to know which coins has potential and avoiding what is known in the crypto world as “shitcoins,” which is used to describe cryptos with little to no value or that has no immediate, discernible purpose.

Ideally, “shitcoins” diminish in value over time due to failed investor interest because it was not created in good faith or because its price was based on speculation. As such, these currencies are considered to be bad investments.

In general, optimism is one thing most players in the crypto market share, despite the volatility of the market, and the ever present threat of governments wielding a stick against the trade.

“Banning bitcoin is a fool’s errand. Some will try; all will fail,” wrote Parker Lewis, author of Unchained Capital. “And the very attempts to ban Bitcoin will accelerate its adoption and proliferation. It will be the hundred mile-per-hour wind that fuels the wildfire. It will also make Bitcoin stronger and more reliable, further immunizing it from attack and reinforcing its anti-fragile nature.”

Elon Musk, the Space X CEO who has invested heavily in cryptos, and has been central to the success of Dogecoin, has some words of caution.

“I think people should not invest their live savings in Cryptocurrency,” Musk told reporters in U.S. last week. “I mean, that’s unwise. But if you want to sort-of speculate that’s fine. There is a good chance that crypto is the future currency of the earth, and we are like, which is it going to be? But it should be considered as a speculation at this point, so don’t go too far.”



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