Business & Economy
‘Avoiding CBN’s Hammer:’ Fintechs Issue Crypto Trading Warning To Customers
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Fintechs, including Opay and PalmPay, are discouraging crypto trading on their platforms.
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Their actions follow a CBN directive to the digital banks to stop onboarding new customers.
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There are concerns that the fintechs are being used for money laundering and terrorism financing.
Eko Hot Blog reports that Nigerian fintech companies have cautioned their customers against trading in cryptocurrency or any virtual currency on their platforms.
At least four fintechs—Opay, Moniepoint, PalmPay and Paga—have communicated this warning to their customers on Friday.
EDITOR’S PICKS
Recall that the Central Bank of Nigeria (CBNL) recently stopped major fintech firms like Kuda, Opay, PalmPay and Moniepoint from onboarding new customers.
The CBN’s move was linked to an ongoing audit of the Know-Your-Customer process of the fintechs, which have been under scrutiny in recent months over concerns around money laundering and terrorism financing.
FINTECHS’ RESPONSE
In an apparent response to the audit, the fintechs threatened to block any accounts found engaging in crypto trading.
In a notice issued on Friday, OPay said it would take strict measures against customers who violate its policy. The fintech said that move aligns with the CBN’s stance on crypto trading.
Opay logo
“In compliance with the CBN directive, please note that OPay prohibits any cryptocurrency and all virtual currency trading. Any account engaging in such activities will be closed, and customer information will be shared with regulatory authorities,” the firm said.
“Please ensure that your account does not involve any cryptocurrency or any other virtual currency transaction.”
Paga logo
Similarly, Paga, a fintech firm that has processed transactions worth $32bn in 15 years of operation, asked customers to avoid using their accounts for crypto and virtual currency transactions.
“As a Paga account holder, please ensure that your account is not used for crypto and virtual currency transactions. Paga accounts in violation of this regulation will be blocked,” it said in an email to its customers on Friday.
Palmpay logo
Likewise, PalmPay, another major player in an emailed statement threatened the suspension of accounts used to transact cryptos or any other virtual assets.
“We strongly advise against using your PalmPay account for transactions involving cryptocurrencies or any other virtual asset,” the fintech said.
“Please be advised that failure to comply with these regulations may result in the suspension of your account.
“Our team is diligently working to ensure full compliance with all regulatory directives, prioritizing the stability and integrity of our platform.”
Moniepoint logo
On Thursday in Lagos, the founder and CEO of Moniepoint, Tosin Eniolorunda, called on cryptocurrency peer-to-peer (P2P) participants to halt their activities. Eniolorunda cited the financial sector’s prohibition on such transactions.
“This is a self-reflection of our industry. As you know, fintech apps are used for fraud. One of the things that led to the most recent announcement is that crypto players were manipulating the naira, especially with the P2P market,” he said.
CBN’S CRACKDOWN ON CRYPTOCURRENCY TRADING
In February, the CBN accused Binance, the world’s largest crypto exchange, of manipulating the naira exchange rate.
Before Binance stopped operation in Nigeria, CBN Governor Olayemi Cardoso said nothing less than $26bn was moved by unknown sources through Binance Nigeria in one year.
FURTHER READING
The CBN and the Office of the National Security Adviser (ONSA) announced a partnership to investigate and penalise those involved in illicit activities within the FX market.
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