By 
In a significant move, the Central Bank of Nigeria (CBN) has implemented a ban on several leading fintech platforms, including Palmpay, Moniepoint, Opay, and Kuda Bank, prohibiting them from onboarding new customers. This decision stems from apprehensions regarding cryptocurrency transactions and deficiencies in their Know-Your-Customer (KYC) procedures.
The CBN’s action follows audits that uncovered potential vulnerabilities in the KYC processes of these fintech companies, raising concerns about potential involvement in money laundering and terrorism financing activities.
Specifically, the CBN has expressed dissatisfaction with the relaxed KYC standards observed by these platforms, which could potentially facilitate illicit activities like cryptocurrency manipulation, posing a threat to the stability of the naira.
Concurrently, the Economic and Financial Crimes Commission (EFCC) has initiated investigations into illegal foreign exchange transactions that have negatively impacted the value of the naira.
As part of these investigations, the EFCC has obtained a court order to freeze over 1,146 bank accounts, primarily associated with fintech operators, suspected of engaging in suspicious activities.
The CBN’s scrutiny has unearthed significant deficiencies in the KYC protocols of fintech giants such as Moniepoint and Opay. Instances were reported where accounts were created without the necessary Biometric Verification Number (BVN) and National Identification Number (NIN). Instead, many accounts were established using unverified phone numbers, underscoring systemic weaknesses in the compliance measures of the fintech sector.
Comments