As the country tightens regulations on the cryptocurrency industry, penalties for companies operating without a license are also increasing. Finally, two crypto firms operating in Nigeria were fined $30,000 for operating without a license when converting USDT to Naira.

This decision was taken by the Federal High Court in Nigeria, which noted that the companies’ activities did not comply with the country’s financial regulations.

According to a report by Nigerian media outlet Nairametrics, the Federal High Court in Abuja found that two companies, Egomsinachi Road Autos Limited and Chimera Log & Haulage Services Limited, were engaged in unlicensed USDT-Naira transactions.

These companies traded cryptocurrencies in violation of Nigeria’s financial regulations, and this has been brought to court as part of increased scrutiny of cryptocurrency trading in Nigeria. The court decided to impose a fine of NGN 50 million (approximately $30,000) on both companies.

This sentence was imposed pursuant to a guilty plea agreement made by the Economic and Financial Crimes Commission (EFCC) in Nigeria. The EFCC supported the guilty plea agreement and demanded that the penalties of both companies be imposed.

The court also ordered each company to pay an additional penalty of NGN 500,000 (approximately $897) to the Federal Government of Nigeria. This decision is the third sentence handed down by the Federal High Court in Nigeria and is an example of the country’s regulations taking a harsh approach towards the cryptocurrency sector.

In a previous case, another crypto company, Official Gredo, was also found guilty of unlicensed activities and ordered to pay NGN 140 million (about $250,000).

This is indicative of the increased scrutiny on the cryptocurrency sector in Nigeria and the government’s high sensitivity to illegal activities in this sector.

According to the court ruling, both companies failed to report all their transactions to the Special Control Unit of the Nigerian Economic and Financial Crimes Commission (EFCC), in accordance with Nigeria’s Money Laundering Prevention and Prohibition Act. This is contrary to the obligation of crypto firms in Nigeria to transparently report their activities.

The court also stated that both firms were operating illegally in Nigeria’s Autonomous Foreign Exchange Market as they were not licensed foreign exchange dealers. Otherwise, these companies reminded that they must comply with Nigeria’s financial regulations.

Chukwubuka Felix Ogumba, director of both companies, admitted the charges and EFCC lawyer Ogechi Ujam demanded that the companies be found guilty. The court also ordered Ogumba to submit a declaration of good conduct.

As in previous cases, it is clear that cryptocurrency firms in Nigeria will face serious penalties if they operate without a license and fail to comply with anti-money laundering laws.

Previously, two other crypto companies named Paparaxy Global Ventures Limited and Lemskin Technologies Limited were also ordered to pay NGN 160 million (about $95,661) to the government for unlicensed operations.

These cases show that regulations on cryptocurrency trading in Nigeria are getting tougher and the government will continue to tighten its controls in this area. It is stated that increasing inspections regarding cryptocurrency trading in the country are aimed at preventing illegal activities in the sector.

As Nigeria seeks to regulate the impact of cryptocurrencies on the financial system, it continues to impose greater responsibilities on both crypto firms and their users. This could be a development that could lead to similar regulations in other countries.