The Central Bank of Nigeria (CBN) has instructed four fintech companies to halt the onboarding of new customers as part of Nigeria’s ongoing efforts to strengthen compliance with Know Your Customer (KYC) regulations in both cryptocurrency and traditional investing.
According to the African publication TechCabal, Nigerian fintech firms OPay, Kuda Bank, Moniepoint, and PalmPay have temporarily suspended the creation of new accounts while an audit of their KYC processes is being conducted. The report cited an individual familiar with the situation.
This restriction on onboarding comes shortly after the Economic and Financial Crimes Commission (EFCC), Nigeria’s law enforcement agency, blocked 1,146 bank accounts involved in unauthorized forex transactions.
However, existing customers of the four fintech firms are still able to deposit and transfer funds as usual. One of the firms made an announcement stating this.
An examination of the 1,146 blocked bank accounts reveals that only 10% are operated by fintechs, with the majority being commercial bank accounts.
The ongoing government intervention is led by the CBN and receives close support from the National Security Agency and the EFCC. In October 2023, Nigerian commercial bank Fidelity Bank halted all outgoing transfers to the same four fintechs due to concerns over KYC compliance.
The absence of strict KYC requirements on these platforms has facilitated incidents of fraud such as tax evasion and money laundering. An executive representing one of the firms stated that the pause on new customer acquisition is temporary and operations will resume after the ongoing audit of their KYC processes is completed.
In related news, the appointment of Emomotimi Agama as the new director-general of the Nigerian Securities and Exchange Commission has been welcomed by crypto enthusiasts, investors, and entrepreneurs.
This appointment is aimed at regulating the capital market, increasing investor confidence, and promoting economic development.
Speaking to Cointelegraph, Nathaniel Luz, CEO of Flincap, an over-the-counter crypto exchange, expressed his enthusiasm about the appointment. He mentioned that the community is eager to work with the new director-general to streamline the licensing process for crypto platforms operating in Nigeria.
Likewise, Lucky Uwakwe, chair of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) and founder of SaBi Exchange, described the appointment as a wise decision.
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