Nigerian fintech cracks down on crypto, users face account bans
Some Nigerian fintech platforms have warned users of using their accounts for crypto transactions or risking severe sanctions in the country's efforts to regulate cryptocurrencies.
Nigerian fintech companies Moniepoint, PalmPay and Paga have announced that their accounts will be suspended if they facilitate crypto transactions with them. This is after the Central Bank of Nigeria (CBN) ordered some new banks, including Moniepoint, to stop onboarding new customers.
In an announcement to customers dated May 2, 2024, Moniepoint said:
“In accordance with the CBN Act, we will close the accounts of anyone involved in transactions in crypto or other virtual assets and share their details with the relevant authorities.”
This announcement marks the reversal of the CBN's earlier announcement to lift the crypto ban by 2021. In a CBN circular issued in December 2023, the central bank directed financial institutions to facilitate account opening, provide designated settlement services and act as intermediaries for companies. Participating in crypto asset transactions.
The December circular replaces existing ones from 2017 and 2021 respectively, stating that banks and other financial institutions are restricted from opening accounts for cryptocurrency service providers.
An X user who is a PalmPay customer said his account was suspended only if he agreed to sign an agreement ordering him to refrain from crypto transactions.
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Paga also sent an email to customers stating that CBN has authorized it and is committed to complying with all regulations.
“We would like to remind you that in accordance with CBN circular reference FPR/DIR/GEN/CIR/06/10, hosting or facilitating transactions in cryptocurrencies and other virtual currencies is not permitted.”
The circular referred to by Paga dated Since 2017, it warns banks and other financial institutions about their relationship with crypto exchanges and customers who trade in cryptocurrency.
The CBN denied that it had previously issued a directive instructing all banks and financial institutions to identify individuals or entities transacting with cryptocurrency exchanges and place such accounts on “Post No Debit” policy. Bank or financial institution to limit certain transactions on the customer's account – for six months.
Financial institutions engaged in crypto or facilitating payments for crypto exchanges are prohibited, the circular said.
Cointelegraph reached out to Moniepoint for comments about the development, but did not receive a response in print.
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