The Central Bank of Nigeria (CBN) has instructed four fintech companies to halt the onboarding of new customers as Nigeria continues its efforts to strengthen Know Your Customer (KYC) compliance in both crypto and traditional investing.
OPay, Kuda Bank, Moniepoint, and PalmPay, Nigerian fintech firms, have temporarily suspended the creation of new accounts while a KYC process audit is underway, as reported by African publication TechCabal. An individual familiar with the situation was quoted in the report.
The decision to restrict 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.
Existing customers of the four fintech firms can still deposit and transfer funds as usual. One of the firms released a statement confirming this.
An examination of the 1,146 blocked bank accounts reveals that only 10% are operated by fintech companies, with the majority belonging to commercial banks.
The ongoing government intervention, led by the CBN and supported by the National Security Agency and the EFCC, aims to address the lack of KYC requirements on these platforms, which has resulted in instances of fraud such as tax evasion and money laundering. A representative from one of the fintech firms stated that the pause on new customer acquisition is temporary and that operations will resume once the KYC audit concludes.
In related news, the appointment of Emomotimi Agama as the new director-general of the Nigerian Securities and Exchange Commission has been well-received by crypto enthusiasts, investors, and entrepreneurs. This appointment is expected to regulate the capital market, increase 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 looks forward to the new director-general collaborating with startups to streamline the licensing process for operating crypto platforms in Nigeria. 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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