Ugandan High Court Rules to Uphold Central Bank’s Crypto Prohibition

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A Judge of a High Court in Uganda recently dismissed an application which sought to quash a Bank of Uganda directive that barred licensed entities and individuals from facilitating crypto transactions. In his ruling, Justice Musa Ssekaana insisted that the central bank’s crypto prohibition does not amount to an infringement on property rights.

Cryptocurrency an ‘Undefined’ Payment System in Uganda

The High Court in Uganda recently dismissed an application that sought to upend a central bank directive that bars cryptocurrency transactions. In his ruling, the court’s Justice Musa Ssekaana, insisted that the Bank of Uganda (BOU)’s April 2022 directive does not infringe on individual property rights. Instead, the directive is an attempt by the central bank not to legalize the “undefined system as a payment instrument in Uganda.”

As previously reported by Bitcoin.com News in May 2022, the BOU warned parties disregarding its directive that it will not hesitate to invoke “its powers under Section 13(l) (b) & (f) of the NPS Act, 2020 for any licensees that will be found in breach of the above directive.”

Immediately after the directive was issued, Silver Kayondo, a Ugandan crypto trader, sought redress via the High Court. In addition to having the court declare cryptos legitimate digital assets, Kayondo also wanted the court to set aside the central bank’s directive.

Bank of Uganda Crypto Directive Properly Issued

However, in ruling against Kayondo’s application, Justice Ssekaana said the BOU acted appropriately when it issued the directive.

“The applicant cannot make a claim for legitimate expectation merely because the public statement did not outlaw the same. The statement did not promise to the applicant or other stakeholders that cryptocurrencies would be allowed in Uganda or would never be regulated. Legitimate expectation relates to a promise in relation to an existing situation which will continue, or to a future benefit, advantage or course of action which the authority will follow,” Justice Ssekaana asserted.

The judge also added that the BOU directive clearly states Uganda’s position with respect to cryptocurrencies and that “the context cannot be distorted to infer any benefit or promise of legality.” Ssekaana also ordered each party to bear the costs of bringing the matter before the courts.

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