Nigerian financial technology companies have cautioned their customers against engaging in cryptocurrency or virtual currency trading on their applications. They have threatened to block any accounts found participating in such activities.
Opay, Moniepoint, PalmPay, and Paga have informed their customers about this on Friday.
The Central Bank of Nigeria recently prohibited major fintech firms like Kuda, Opay, PalmPay, and Moniepoint from accepting new customers.
The CBN’s action was related to an ongoing review of the Know-Your-Customer process of the fintechs, which have been under scrutiny in recent months due to concerns about money laundering and terrorism financing.
Before the CBN’s directive, the Economic and Financial Crimes Commission 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 stated that it would take strict measures against customers who violate its policy, in line with the Central Bank of Nigeria’s stance on cryptocurrency trading.
“Following the CBN directive, please note that Opay prohibits all cryptocurrency and virtual currency trading. Any account engaging in such activities will be closed, and customer information will be shared with regulatory authorities.
“Ensure that your account does not involve any cryptocurrency or virtual currency transactions,” the fintech firm cautioned.
Similarly, Paga, a fintech firm that has processed transactions worth $32bn in 15 years, informed its customers via email to ensure that their accounts are not used for crypto and virtual currency transactions. Paga accounts in violation of this regulation will be blocked.
PalmPay, another major player, stated in an emailed message, “We strongly advise against using your PalmPay account for cryptocurrency or any other virtual asset transactions. Failure to comply with these regulations may lead to the suspension of your account.
“Our team is working diligently to ensure full compliance with regulatory directives and prioritize the stability and integrity of our platform,” the fintech stated.
In Lagos, the founder and CEO of Moniepoint called for a halt to cryptocurrency peer-to-peer (P2P) activities, citing the financial sector’s prohibition on such transactions.
“This reflects the state of our industry. Fintech apps are commonly used for fraud. One reason for the recent announcement is that crypto players were manipulating the naira, especially with the P2P market,” he said.
Recently, key players in the financial technology sector were summoned to Abuja for discussions on KYC protocols, emphasizing the regulatory scrutiny faced by the industry.
The apex bank also cracked down on cryptocurrency exchange, Binance, in February after accusations of manipulating the naira exchange rate.
CBN Governor Olayemi Cardoso reported that over $26 billion was transferred through Binance Nigeria by unknown sources within one year before Binance ceased operations.
The CBN and the Office of the National Security Adviser (ONSA) have announced a joint effort to investigate and impose penalties on those participating in illegal activities in the FX market.
