Four fintech businesses have been told by the Central Bank of Nigeria (CBN) to cease accepting new clients until further notice.
OPay, Palmpay, Kuda Bank, and Moniepoint are the four fintechs. The mandate relates to accounts that are purportedly used for illicit FX trading, as two of the fintechs confirmed to THE MATRIX.
They did, however, note that since the majority of the accounts under question were commercial bank accounts, it’s possible that the direction was misdirected.
“I can confirm that 90% of the accounts involved in the illegal forex trading are commercial bank accounts while fintech accounts were just 10%. Why has the CBN not asked the banks to stop onboarding new customers? We have a general problem, coming for fintechs is just like looking at the easy prey,” one of the sources said.
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THE MATRIX earlier reported that the Economic and Financial Crimes Commission (EFCC) recently secured a court order to freeze at least 1,146 bank accounts owned by various individuals and companies allegedly involved in illegal foreign exchange transactions.
Justice Emeka Nwite, in a decision on the ex-parte motion presented by the anti-graft agency’s lawyer, Ekele Iheanacho, also approved the commission’s request to complete the investigation within 90 days.
Though the verdict was issued on April 24, its certified true copy was granted on Monday. The other offenses under investigation by the EFCC involve money laundering and terrorism financing.
A look at the list of the affected accounts shows that indeed most of the bank accounts involved are mostly deposit money bank accounts.
In its request for the order to block the accounts, the EFCC disclosed that its preliminary investigation revealed that the bank accounts are linked to persons who take advantage of the virtual cryptocurrency exchange platforms to illegally manipulate the value of Naira and launder the proceeds of unlawful activities.
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It also cited the need to preserve the funds in the identified bank accounts pending the conclusion of the investigation and possible prosecution.
Although a copy of the court order for the blockage of the accounts sighted by THE MATRIX, shows that most of the accounts involved in the alleged illegal forex trading were commercial bank accounts, the banks have not been directed to stop onboarding new customers. According to one fintech industry source who would not want to be named, this shows that there is a stronger and better relationship between the banks and the CBN compared with fintechs.
“In terms of KYC, the fintechs are doing better than the banks, but all eyes seem to be on the fintechs whenever the issue of KYC occurs.
“On the issue of payment fraud, fintechs are also often seen as the platforms where frauds happen, but this is an industry-wide problem. In fact, if you see the amount of money the banks are losing to fraud, you will marvel. No fintech can lose that amount of money and remain in business,” the source said.
