The saga of the bankrupt cryptocurrency exchange FTX took a surprising turn as it announced its ambitious plan to repay its creditors the staggering sum of $11 billion, a move propelled by the recent resurgence in bitcoin prices typical of the ever-fluctuating habit of the crypto market.

Assuming the mantle of leadership post the downfall of Sam Bankman-Fried, John Ray III expressed confidence in FTX’s capacity to honor its debts in full. With the prospect of netting over $16 billion through the liquidation of its remaining assets, Ray heralded the proposed Chapter 11 plan as a beacon of hope amid the tumult that had engulfed the exchange, according to The Guardian.

“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors,” the bankruptcy expert said.

Ray joined FTX shortly after the company filed for bankruptcy, much to the dismay of Bankman-Fried, who sought a replacement committed to maintaining the company’s operations.

Before joining FTX, Ray’s notable role involved overseeing the dissolution of Californian energy giant Enron. He assumed the position of chair of the company after it emerged from bankruptcy in 2004, dedicating five years to winding down its operations and ultimately returning over half of creditors’ funds.

At the heart of FTX’s financial turnaround lies a fortuitous dissonance between its dollar-denominated liabilities and its assets, largely comprising speculative digital assets and stakes in burgeoning startups. The meteoric ascent of bitcoin prices, soaring from the depths of $20,000 during FTX’s nadir in November 2022 to an astronomical valuation presently, has proven instrumental in boosting the exchange’s fiscal viability.

While the legal guarantee of full reimbursement offers solace to FTX creditors, the bitter taste of missed opportunities lingers among former platform users, who were compelled to offload their crypto holdings at discounted rates during the exchange’s collapse.

The winds of fortune further favored FTX with its lucrative stake in the AI startup Anthropic, fetching a handsome sum of $824 million upon divestment earlier this year. However, the shadow of ignominy loomed over the exchange’s erstwhile figurehead, Sam Bankman-Fried, who found himself ensnared in the web of legal tussles, culminating in a 25-year prison sentence handed to him in March.

As part of the courtroom drama, Bankman-Fried attempted to plead for leniency, contending that the anticipated restitution to depositors should mitigate his culpability. However, Judge Lewis Kaplan rebuffed this plea, likening it to a thief seeking absolution after squandering ill-gotten gains in the gambler’s den of Las Vegas.

Bankman-Fried maintained that he was innocent of any fraud throughout the trial, claiming that the implosion of FTX was a result of unintentional mistakes.

 ‘I never thought that what I was doing was illegal. But I tried to hold myself to a high standard, and I certainly didn’t meet that standard,” he said.

The proposed FTX repayment plan awaits court approval before funds can be disbursed to former depositors. John Ray’s intervention and subsequent management of FTX have played a pivotal role in its rehabilitation, notwithstanding initial opposition from Bankman-Fried, who had hoped for a successor committed to maintaining the company’s operations.

Despite facing initial resistance from Bankman-Fried, who harbored hopes of preserving the company’s legacy, Ray’s emergence now signals a new dawn of hope for the depositors of the embattled exchange. 

This is an A+ decision from the lower chamber of Nigeria’s parliament: “The House of Representatives has taken a firm stance against the implementation of the Central Bank of Nigeria’s (CBN) cybersecurity levy, calling for an immediate halt to its execution..

“In a motion presented by Minority Leader Kingsley Chinda (PDP Rivers) on behalf of the members, the House emphasized the need for the CBN to withdraw its previous circular on the levy and issue a new one consistent with the provisions of the Cybercrime Act. Section 44(2a) of the act specifies entities such as GSM and telecom companies, internet providers, banks, financial institutions, insurance companies, and the Stock Exchange as liable for the levy, not individual Nigerians.”

Of course they can add those “extras” to our bills. But there is a difference: at least We The People can decide not to consume those services, and get away from the levy. As we discussed here, there is no law in the books which supports what the apex bank did. We do hope this will bring this distraction to a good conclusion while we wait for another one.

I must commend the House, Senate and also the government for listening. We are saying: if you want more tax revenue, create GROWTH policies so that companies, citizens, etc can make money and pay taxes. But taxing bland bank transactions is not wisdom in any form.

This is an A+ decision from the lower chamber of Nigeria’s parliament: “The House of Representatives has taken a firm stance against the implementation of the Central Bank of Nigeria’s (CBN) cybersecurity levy, calling for an immediate halt to its execution..

“In a motion… pic.twitter.com/EvJKJSpBb5

— Ndubuisi Ekekwe (@ndekekwe) May 9, 2024

Updated: The Nigerian Senate seems to be supporting this.

Amidst anger from Nigerians, particularly the Organised Private Sector, regarding the 0.5% cybersecurity levy on electronic transactions, the Senate has defended the proposed implementation by the Central Bank of Nigeria (CBN).

By virtue of provisions of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to half a per cent of all electronic transaction values by the businesses specified in the Second Schedule of the Act is to be remitted to the National Cybersecurity Fund, which the Office of the National Security Adviser shall administer.

Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, stated in a statement that “the levy is not punitive as it has numerous exemptions to protect and relieve ordinary citizens, particularly the poor.”

The Senate and House On This Matter

The Senate said that the 0.5% cybersecurity levy is the law of the land. And the House of Representatives is in agreement, but where they differ is who is going to pay it. The House thinks the citizens or individuals are not the ones to pay the levy; some companies are to make the payments. Of course, the bird which leaves the ground and perches on the anti-hill is still on the ground. If you ask telcos, banks, etc to make this payment, they will find ways to push it to the citizens!

From Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba: “The Cybercrimes Act of 2015 has provisions for imposing a cybersecurity levy since its enactment, but the vagueness of Section 44 led to different interpretations until the 2024 amendments. The levy is 0.5%, equivalent to half a per cent of the value of all electronic transactions by businesses specified in the Second Schedule to the Act.

“The amendments addressed crucial gaps in the Act and empowered the nation to implement the National Cybersecurity Programme effectively. They also seek to realign and empower the country to combat the inadequate funding and disruptive effects of cyber threats on national security and critical economic infrastructures,” he said.

From House of Reps: “Section 44(2a) of the act specifies entities such as GSM and telecom companies, internet providers, banks, financial institutions, insurance companies, and the Stock Exchange as liable for the levy, not individual Nigerians.”

We will see how this develops.

The House of Representatives has taken a firm stance against the implementation of the Central Bank of Nigeria’s (CBN) cybersecurity levy, calling for an immediate halt to its execution. 

This directive comes in response to a circular issued by the apex bank, which the House believes is prone to misinterpretation by Nigerians and violates the provisions of the Cybercrime Act.

In a motion presented by Minority Leader Kingsley Chinda (PDP Rivers) on behalf of the members, the House emphasized the need for the CBN to withdraw its previous circular on the levy and issue a new one consistent with the provisions of the Cybercrime Act. Section 44(2a) of the act specifies entities such as GSM and telecom companies, internet providers, banks, financial institutions, insurance companies, and the Stock Exchange as liable for the levy, not individual Nigerians.

The decision by the House reflects concerns that the implementation of the levy has the potential to aggravate economic hardships faced by Nigerians, particularly in light of ongoing challenges such as the increase in petroleum product prices, and the free fall of the naira resulting in sky-high inflation. 

The circular from the CBN has stirred apprehension across the country, prompting calls for its immediate withdrawal.

Peter Obi, the former presidential candidate of the Labour Party has condemned the Cybersecurity Levy, describing it as ‘‘milking a dying economy.’’ In a statement issued on Wednesday, Obi decried the rate President Bola Tinubu’s government is increasing taxes, despite his assurances to address multiple taxation as a way of creating a conducive business environment.

‘‘The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate,’’ he said.

Also, the Centre for the Promotion of Private Enterprise (CPPE) raised alarm over the adverse effects of the newly introduced cybersecurity levy and a barrage of other taxes imposed by various tiers of government in Nigeria. 

A statement signed by Dr. Muda Yusuf, the CEO of CPPE, raised concerns regarding the detrimental impact of these levies on the capacity of businesses to stimulate economic growth.

“Businesses and the generality of citizens are yet to recover from the shocks of current reforms. Inflationary pressures have not abated, high cost of living is still a major worry, operating and production costs for businesses remain elevated, amidst weak consumer purchasing power. This is not a good time to impose an additional levy both on businesses and citizens,” he said.

Socio-Economic Rights and Accountability Project (SERAP) has condemned the policy, giving the federal government a 48-hour ultimatum to retract the 0.5% cybersecurity levy imposed on Nigerians. 

The levy, directed by the CBN to be implemented effective May 20, 2024, entails a 0.5% charge on electronic transactions, with proceeds remitted to the National Cybersecurity Fund administered by the Office of the National Security Adviser (NSA), headed by former Chairman of the Economic and Financial Crimes Commission (EFCC) Nuhu Ribadu.

The CBN’s clarification indicates that the levy will be reflected in customers’ accounts as a “Cybersecurity Levy” and applied at the point of electronic transfer origination, subsequently deducted and remitted by financial institutions. Despite the CBN’s assertion that this directive aligns with previous circulars issued in 2018, criticism persists regarding its potential adverse effects on Nigerians already grappling with economic challenges.