Nigeria: Cryptocurrency: Kuda reacts to claims of accounts closure

Reacting to recent complaints, Kuda Bank has issued a statement to its customers reiterating its resolve to obey the rules and regulations of the CBN as it carries out its operations.

The bank, in a statement that informed customers that if it did not act against fraudulent acts, the bank would be considered to be breaking the law.

The message partly read: “Let’s be crystal clear: We are on your side. We are your bank. There should never be any doubt about this.

“But as much as we are on your side, we are also a licensed financial institution and our banking license comes with regulations and rules that we must obey.

“If we disobey these regulations and rules, we will not be allowed to continue running a bank for you or anyone else. There will be no bank of the free if we break the law.

“So when a Kuda customer uses their account in a way that breaks the law, we must do what the law demands.

“In some cases, this could be as simple as asking the customer to explain what they use their account for. This is part of a standard KYC (Know Your Customer) process for any financial institution.

“In cases of clear fraud, the law demands that we report the customer to the appropriate authorities and close their account with us so that they won’t continue to defraud other people of their money with that account.

“Remember that it could be you being defrauded, and we must do everything in our power to prevent this from happening.

“If we do not do what the law demands in these cases, we will also be considered to be breaking the law.

“This is why, for example, we have advised everyone not to use their Kuda account for cryptocurrency transactions of any kind, otherwise we’ll be forced to close their account as demanded by regulations.

“As of today, licensed financial institutions like ours are prohibited from enabling cryptocurrency transactions and we are not allowed to ignore this prohibition. It is simply what the law demands.”

Kuda Bank was the first Nigerian bank to gain collaboration with Binance, a popular crypto exchange, and it was a big advocate of cryptocurrency at the time, according to a source. However, everything changed after the apex bank placed a ban on the transaction of cryptocurrency.

Following the CBN’s announcement, on February 12, 2021, Kuda Bank sent a message to customers notifying them of its new cryptocurrency position.

The message reaa: “In the light of the recent letters and statements issued by the Central Bank of Nigeria concerning transactions relating to cryptocurrency, please note that Kuda Microfinance Bank is not allowed to and does not deal in, or facilitate the trading of, any form of cryptocurrency.

“Consequently, we strongly advise that you do not use your Kuda account for cryptocurrency-related activities so you don’t get into trouble with the law.”