The Central Bank of Nigeria (CBN) has instructed four fintech companies to cease accepting new customers as part of Nigeria’s ongoing efforts to strengthen compliance with Know Your Customer (KYC) regulations in both crypto and traditional investments.
OPay, Kuda Bank, Moniepoint, and PalmPay, all Nigerian fintech firms, have temporarily stopped creating new accounts while the KYC process undergoes an audit, according to the African publication TechCabal. An individual familiar with the situation confirmed this information.
This restriction on onboarding new customers 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 these four fintech firms can still deposit and transfer funds as usual. One of the firms announced that out of the 1,146 blocked bank accounts, only 10% belong to fintech companies, with the majority being commercial bank accounts.
The ongoing government intervention is being led by the CBN, with support from the National Security Agency and the EFCC. In October 2023, Nigerian commercial bank Fidelity Bank also blocked outgoing transfers to these same four fintech companies due to concerns about their KYC requirements.
The absence of robust KYC requirements on these platforms has led to incidents of fraud, including tax evasion and money laundering. An executive from one of the firms stated that the pause on acquiring new customers is temporary, and operations will resume once the ongoing audit of their KYC process is completed.
In related news, the appointment of Emomotimi Agama as the new director-general of the Nigerian Securities and Exchange Commission has been positively received by crypto enthusiasts, investors, and entrepreneurs. This appointment aims to regulate the capital market, boost investor confidence, and promote economic development.
Nathaniel Luz, CEO of Flincap, an over-the-counter crypto exchange, expressed excitement about the appointment, stating that the community is eager to work with the new director-general to streamline the licensing process for crypto platform operations in Nigeria.
Similarly, Lucky Uwakwe, chair of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) and founder of SaBi Exchange, described the appointment as a wise decision.
In other news, a recent magazine report suggests that 68% of Runes are in the red, raising questions about whether they are truly an upgrade for Bitcoin.