Nigeria is working to improve Know Your Customer (KYC) compliance in both traditional and cryptocurrency investment. As part of this effort, the Central Bank of Nigeria (CBN) has ordered four fintech companies to cease accepting new clients.
As part of an ongoing assessment of the KYC process, Nigerian fintech companies OPay, Kuda Bank, Moniepoint, and PalmPay have halted the opening of new accounts, according to the African website TechCabal. According to a source with knowledge of the circumstances,
"A lot of cryptocurrency traders, in the CBN's opinion, were using fintech platforms to disrupt the FX (Forex) market."
The Economic and Financial Crimes Commission (EFCC), a Nigerian law enforcement organization, closed 1,146 bank accounts linked to illicit foreign exchange transactions only after the onboarding limitation was put in place.
Nonetheless, current clients of the four fintech companies can continue to deposit and move money normally. One of the businesses declared:
"We've put a temporary stop to new signups on our website. This indicates that you are not going to be able to create a new account at this time. We regret any inconvenience that this may have caused."
Just 10% of the 1,146 restricted bank accounts are run by fintechs; most are commercial bank accounts, according to a study of the data.
Under CBN's direction, the National Security Agency (NSA) and the EFCC provide strong assistance for the ongoing government intervention. Because of KYC issues, Nigerian commercial bank Fidelity Bank prohibited all outward transfers to the same four fintechs in October 2023.
Fraud occurrences including tax evasion and money laundering were accelerated by the platforms' absence of KYC standards. The halt on acquiring new clients is "temporary," according to an executive from one of the companies, and activities will restart once the ongoing audit of their KYC procedure is over.
The selection of Emomotimi Agama as the new Director-General of the Securities and Exchange Commission (SEC) was well-received by investors, entrepreneurs, and cryptocurrency aficionados.
The objectives of this position are to foster economic growth, improve investor confidence, and control the capital market. The CEO of an over-the-counter cryptocurrency exchange called Flincap, Nathaniel Luz.
According to him, the community is anticipating that the incoming chair will collaborate with entrepreneurs to expedite the licensing procedure for running cryptocurrency platforms in Nigeria.
In a similar vein, Lucky Uwakwe, the creator of SaBi Exchange and chair of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), called the nomination a "wise decision."
May 2024, Cryptoniteuae