Nigerian fintech companies have warned their customers against trading in cryptocurrency or any virtual currency on their apps, threatening to block any accounts found engaging in such activities. Nigeria Government is now putting unnecessary pressure on these fintech companies that brought simple solutions for digital translations
At least 3 fintechs—Opay, PalmPay and Paga—have communicated this development to their customers on Friday stating there will be a ban on customers trading in cryptocurrency..
Last week, the Central Bank of Nigeria stopped major fintech firms like Kuda, Opay, and PalmPay from onboarding new customers.
The CBN’s move was linked to an ongoing audit of the Know-Your-Customer (KYC) process of the fintechs, which have been under scrutiny in recent months over concerns around money laundering and terrorism financing in Nigeria.
Before the CBN’s directive, the Economic and Financial Crimes Commission (EFCC) had obtained a court order to freeze at least 1,146 bank accounts owned by various individuals and companies allegedly involved in illegal foreign exchange transactions.
In a notice issued on Friday, OPay said it would take strict measures against customers who violate its policy, which aligns with the Central Bank of Nigeria’s stance on cryptocurrency trading.
“In compliance with the CBN directive, please note that OPay prohibits any cryptocurrency and all virtual currency trading. Any account engaging in such activities will be closed, and customer information will be shared with regulatory authorities.
“Please ensure that your account does not involve any cryptocurrency or any other virtual currency transaction,” the fintech firm warned.
In a similar move, Paga, a fintech firm that has processed transactions worth $20bn in 15 years of operation, said in an email to its customers, “As a Paga account holder, please ensure that your account is not used for crypto and virtual currency transactions. [/b]Paga accounts in violation of this regulation will be blocked if found guilty
Palmpay another major player in an emailed statement said, “We strongly advise against the use of your PalmPay account for transactions involving cryptocurrencies or any other virtual assets. Please be advised that failure to comply with these regulations may result in the suspension of your account with immediate effect.
“Our team is diligently working to ensure full compliance with all regulatory directives, prioritizing the stability and integrity of our platform,” the fintech bank stated.
“This is a self-reflection of our industry. As you know, fintech apps are used for fraud. One of the things that led to the most recent announcement is that crypto players were manipulating the naira, especially with the P2P market,” he said.
Recently, key players in the fintech sector were summoned to Abuja for discussions on KYC protocols, underscoring the regulatory scrutiny facing the industry.
The apex bank had also crackdown on cryptocurrency exchange, Binance in February after being accused of manipulating the naira exchange rate which resulted restricting Binance trading crypto in Nigeria through P2P
Before Binance stopped operation, CBN Governor Olayemi Cardoso said nothing less than $26bn was moved by unknown sources through Binance Nigeria in one year.
The CBN and the Office of the National Security Adviser (ONSA) announced a partnership to investigate and penalise those involved in illicit activities within the FX market which makes the naira to fall drastically against the naira.
All investigations carried out to ensure the currency rise against the dollar, but all preventive measure masterminded by the CBN has not been effective
Nigeria government should focus on diversifying the economy and raising tax income, instead of blaming people for forex issues. The same speculation has been happening for years. SO banning crypto and forex speculation. It’s simply like building a Potemkin city. It looks good on the outside, but behind it is all rotten. It won’t stop the naira being weak, so long as Nigeria are NOT A PRODUCER NATION.