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Reports indicate that Nigerian fintech firms have initiated tighter controls on crypto transactions within the country, following a directive issued by the Central Bank of Nigeria (CBN).
The CBN’s directive instructs fintech companies to crack down on transactions identified as crypto-related and report them to relevant authorities. The Apex bank alleges that numerous crypto traders in Nigeria are exploiting various platforms to manipulate the forex market.
In response to this directive, several fintech platforms in Nigeria, including Kuda, Moniepoint, Opay, and Palmpay, have temporarily suspended the opening of new customer accounts.
Additionally, Moniepoint and Paga have notified their customers that engaging in crypto transactions using their accounts could lead to the suspension or closure of their accounts.
In a notification sent to customers on May 2, 2024, Moniepoint stated:
“In accordance with CBN regulations, we will close the accounts of individuals involved in cryptocurrency transactions or other virtual asset transactions and provide their details to relevant authorities.”
Similarly, Paga sent a message to its customers, stating:
“Pursuant to CBN circular with reference FPR/DIR/GEN/CIR/06/10, we would like to remind you that dealing in or facilitating transactions in cryptocurrency and other virtual currencies is prohibited.”
The proposed ban on peer-to-peer (P2P) trading stems from the CBN’s claim that crypto traders utilize this method to manipulate the Naira through pump-and-dump schemes. Notably, Nigeria’s National Security Adviser (NSA) is poised to classify crypto trading as a national security threat.
The CBN’s directive to restrict crypto transactions marks a reversal of the apex bank’s earlier announcement to lift the crypto ban imposed in 2021.
Recall that in December 2023, the CBN issued a circular mandating financial institutions to open accounts, provide designated settlement accounts and settlement services, and serve as channels for forex inflows and trade for firms engaging in crypto assets.
However, with the recent reinstatement of the ban on crypto platforms and transactions, the Nigerian government has voiced concerns about its impact on the devaluation of the Naira, among other challenges.
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