CBN Directive Spurs Crackdown Amid Concerns Over Money Laundering And Terrorism Financing
The Central Bank of Nigeria (CBN) recent directive have spurred crackdown on bank accounts, amid concerns over money laundering and terrorism financing.
Several fintech companies in Nigeria, which includes Opay, Moniepoint, PalmPay, and Paga, have issued stern warnings to their customers against engaging in cryptocurrency trading or any virtual currency transactions through their platforms.
The move comes in the wake of a directive from the Central Bank of Nigeria (CBN), which recently halted major these fintech firms (Kuda, Opay, PalmPay, and Moniepoint) from onboarding new customers as part of an ongoing audit of their Know-Your-Customer processes.
The CBN’s action is reportedly linked to concerns around money laundering and terrorism financing, which have put fintechs under increased scrutiny in recent months. Prior to the directive, the Economic and Financial Crimes Commission (EFCC) obtained a court order to freeze over 1,100 bank accounts allegedly involved in illegal foreign exchange transactions.
In notices issued to their customers, fintech firms such as OPay, Paga, and PalmPay emphasized strict compliance with the CBN’s stance on cryptocurrency trading. OPay, for instance, warned that any account found engaging in such activities would be closed, with customer information shared with regulatory authorities.
Similarly, Paga, a prominent fintech firm with a transaction history worth $32 billion over 15 years, notified its account holders to refrain from cryptocurrency and virtual currency transactions to avoid account blocks.
PalmPay echoed these sentiments, advising against using their platform for cryptocurrency transactions and cautioning that failure to comply with regulations could result in account suspension.
In a separate development, Tosin Eniolorunda, the founder and CEO of Moniepoint, urged participants in cryptocurrency peer-to-peer (P2P) transactions to cease their activities in light of the financial sector’s prohibition on such transactions. This move underscores the tightening regulatory environment surrounding cryptocurrency trading in Nigeria and the broader implications for fintech companies and their customers.
