Over the years, BITCOIN, the biggest cryptocurrency by value and market capitalization has enjoyed increasing acceptability.Retail stores, brokers, online market places began to accept BITCOIN as a mean of exchange.This meant more demand for BITCOIN which caused its price to soar.In China, BITCOIN was even traded as a safe haven asset as Chinese investors sought to hedge against their devalued currency.However, recently many regulatory bodies, including the China Central Bank issued a warning to major BITCOIN exchanges.In this article let’s take a look at why the Central Bank of Nigeria warns against Bitcoin.25 January, AtoZForex – A major reason why the Nigeria apex bank warned against BITCOIN and other cryptocurrencies is because of the moribund MMM scheme throughout the last year.Hence the reason why the Central Bank of Nigeria (CBN) issued warnings against the MMM scheme.The government even went to the extent of trying to block bank accounts of any of its members.This however, yielded little results as the members began using BITCOIN as a means of exchange.

With the near impossible task of tracking BITCOIN users, the scheme flourished not only in Nigeria, but also at a global level.When the scheme crashed in December, the Central Bank issued another MMM warning.According to Internet Live Stats in 2016 the total number of Nigerian internet users surged to 86,219,965.Share of Nigeria Population: 46.1 % (penetration) Total Population : 186,987,563 Share of World Internet Users: 2.5 % Internet Users in the World: 3,424,971,237 Nigerians looking for alternative safe heavens as the number of internet users rose, and CBN’s monetary policy put the Naira heads down.As a result many of the opportunity takers flooded the Nigerian Bitcoin market as well.As a result, we have seen premiums in blackmarket Nigerian Bitcoin exchanges rising as much as $500.Nigeria is not the only country paying such high price for Bitcoin, though.In Asia, India sees a similar trend, ever since the government made most of the cash supply useless.However, Indian Bitcoin premium is a lot lower, sitting at “just” 10-20% over the global average.

CBN Bitcoin warning Now, here comes the CBN Bitcoin warning.In a statement, CBN said virtual currencies are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions.ethereum success stories“Ensure that you do not use, hold, trade and/or transact in any way in virtual currencies.ios bitcoin miner appEnsure that existing customers that are virtual currency exchanges have effective capital controls that enable them to comply with customer identification, verification and transfer, monitoring requirements….. Any suspicious transactions by these customers should immediately be reported to the Nigerian Finance Intelligence Unit (NFIU).” Interestingly, a few weeks ago, the CBN set up a committee to look at the possibility of regulating BITCOIN.bitcoin mining diy

Thus, a member of the committee said it was as a result of banks in Europe that had accepted BITCOINS as a means of exchange.bitcoin precio graficoWith this new development however, exchanges and operators of BITCOIN will have to be on guard.ethereum payment processorWhat is your thoughts on the Central Bank of Nigeria warning against BITCOIN?bitcoin chart excelShare your view in the comments section below.bitcoin belly upChina's central bank barred financial institutions from handling Bitcoin transactions after investors lost money on fraudulent online platforms for the virtual currency.bitcoin al giornoThe move also follows an 89-fold jump in the virtual currency's value this year, supported in part by demand from Chinese investors.first bitcoin lawsuit

"Judging from its nature, Bitcoin is a specific virtual commodity.It does not have the same legal status as a currency and can't, and should not, circulate in the market," the People's Bank of China said in a statement posted on Thursday on its website.The central bank published the statement jointly with the China Securities Regulatory Commission, the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the Ministry of Industry and Information Technology.The virtual currency does not bring systemic risks to China's financial system at the current stage, said the central bank, as the number of Bitcoins in circulation and the market scale are both limited.No financial institutions of any kind should have a direct involvement in Bitcoin deals, it said.Financial institutions are banned from, among other things, trading, settling and market-making deals using Bitcoins, it added.Websites that provide Bitcoin-related services will be asked to register with the country's telecommunication authorities.

The central bank said that the virtual currency could be used for reckless speculation, money laundering, drug and gun transactions, gambling and other illegal activities.It could also be used by terrorists to fund attacks, it added.Investors and holders of Bitcoins in China said that the move may limit demand for the virtual currency in the country, but regulating the coin also means that authorities recognize its impact on financial markets."The ban on Bitcoin transactions for financial institutions may make some investors think that the virtual currency will not have the liquidity they expected, and they may withdraw from the market," said Chen Xiao, a Shanghai-based holder of the currency."But on the other hand, regulators haven't banned the use and trading of the coin on Internet platforms, so that means that the currency was not labeled as illegal."The Bitcoin was being traded at 5,920.87 yuan ($970) per coin on BTC China, the largest Bitcoin exchange in the country, at 6 pm on Thursday.

On Sunday, the price on BTC China hit 7,395 yuan, an all-time high.BTC China's CEO Bobby Lee was quoted by Bloomberg News on Thursday as saying that the regulators' move will protect the interests of consumers.Lee added that BTC China is seeking recognition from the authorities for the currency so that it can be used to pay for goods and services instead of being used solely for speculation, the Bloomberg report said."Bitcoin trading can be considered a high-risk activity.Bitcoin prices are volatile, and can swing wildly, from day to day.Please use extreme caution when making the decision to invest in, or to sell, Bitcoin.BTC China is not asking users to buy or sell Bitcoin as an investment or for profit.All Bitcoin trading decisions should be made independently by the user," says the risk disclaimer on BTC China's website.Fraudulent trading platforms have been raising concerns among Bitcoin investors in China."Trading Bitcoin on online platforms may not be as transparent as wiring money online — you don't see the money arriving in your bank account soon after the transaction; sometimes, it may take days to see where your money went," said Qian Zheng, a former Bitcoin trader.

"I won't trade Bitcoin again until there's a platform that gets legal recognition from regulators," Qian added.Chinese police have detained three people who allegedly operated a fraudulent online Bitcoin trading platform, shut it down unexpectedly and then vanished with the investors' assets, the Xinhua News Agency reported yesterday.Police said the trading volume of the platform, which claimed to be based in Hong Kong, grew gradually and it eventually ranked fourth in the country.By the end of September, the platform had attracted 4,493 registered users who traded Bitcoin as if they were buying and selling stocks or futures, the police said.The platform closed suddenly on Oct 26 and its management team could not be contacted after that, Dongyang police in Zhejiang province said.An investor surnamed Qiao lost 90,000 yuan and reported the case to the Dongyang police department, which immediately started an investigation.According to a report in Hong Kong-based newspaper The Standard, investors might have lost up to 25 million yuan.