Nigeria Imposes Restrictions on Fintech Onboarding for Crypto Investors

The Central Bank of Nigeria (CBN) has instructed four fintech companies to suspend the onboarding of new customers as part of the country’s efforts to strengthen Know Your Customer (KYC) compliance in both crypto and traditional investing. Nigerian fintech firms OPay, Kuda Bank, Moniepoint, and PalmPay have temporarily halted the creation of new accounts while a review of the KYC process takes place. The CBN is concerned that these fintech platforms are being used by crypto traders to disrupt the foreign exchange (FX) market. The restriction only applies to new customers, and existing customers can still deposit and transfer funds as usual.

Out of the 1,146 bank accounts that Nigeria’s Economic and Financial Crimes Commission (EFCC) has blocked for unauthorized forex dealings, only 10% are operated by fintech companies, with the majority being commercial bank accounts. The ongoing intervention by the government is being led by the CBN, with support from the National Security Agency (NSA) and the EFCC. In October 2023, Fidelity Bank, a Nigerian commercial bank, also blocked outgoing transfers to the same four fintech companies due to concerns about their KYC requirements, which had facilitated fraudulent activities like tax evasion and money laundering.

The four fintech firms have reassured their existing customers that they can continue to use their services without any disruption. One of the firms stated that the pause in new signups is temporary and apologized for any inconvenience caused. The Nigerian crypto community has welcomed the appointment of Emomotimi Agama as the new Director-General of the Securities and Exchange Commission (SEC). This appointment is expected to bring about increased regulation in the capital market, boost investor confidence, and promote economic development. Industry insiders believe that Agama’s leadership will enable startups to streamline the licensing process for operating crypto platforms in Nigeria.

Nathaniel Luz, CEO of Flincap, an over-the-counter crypto exchange, expressed his excitement about Agama’s appointment. He emphasized the community’s desire for collaboration with startups to improve the licensing process. Lucky Uwakwe, chair of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) and founder of SaBi Exchange, described the appointment as a wise decision and echoed the sentiment that it will benefit the crypto industry in the country.

8 thoughts on “Nigeria Imposes Restrictions on Fintech Onboarding for Crypto Investors

  1. Fidelity Bank blocking transfers to these fintech companies was already a red flag. Now the CBN is joining in with more scrutiny. It’s not a good sign for the industry.

  2. Agama’s appointment is a great step towards improving the licensing process. We need someone who understands the crypto industry’s potential. πŸ™ŒπŸ’ͺ

  3. This appointment is definitely a step in the right direction. Agama’s expertise will help Nigeria’s crypto industry grow and thrive.

  4. Existing customers can still deposit and transfer funds without any disruptions. That’s a relief for everyone involved! πŸ™πŸ’°

  5. The appointment of Emomotimi Agama as the new Director-General of the SEC is a positive development for the Nigerian crypto community. Increased regulation and investor confidence are on the horizon! πŸ’ΌπŸ“ˆ

  6. It’s frustrating how fintech companies are being blamed for the actions of a few. They are not the main problem here.

  7. I hope this KYC review doesn’t take too long. It’s inconvenient for new customers who want to join these platforms. πŸ˜’

  8. Finally, some positive news with the appointment of Emomotimi Agama! Hopefully, this will lead to better regulations and opportunities for the crypto industry in Nigeria.

Leave a Reply