Three fintech companies, Moniepoint, Paga, and Palmpay, liaise with the Nigerian government and CBN to freeze their users’ accounts associated with crypto.
The Nigerian National Security Adviser (NSA) has tagged cryptocurrency as a highly national issue that needs to be tackled to avoid further damage. The NSA urges banks and fintech companies to report suspected accounts associated with crypto trading.
According to Tosin Eniolorunda, the CEO of Moniepoint, the Nigerian government and the CBN have initiated a new policy that bans peer-to-peer (P2P) trading of cryptocurrency.
However, the new policy on P2P will be made public and mark a significant regulatory shift. The Bola Tinubu administration loosened up on cryptocurrency after the Central bank lifted a two-year ban in December 2023.
After the ban, over three crypto-exchange platforms contacted the Securities and Exchange Commission (SEC) over a crypto license.
The ban on P2P resulted from the central bank’s belief that crypto traders use P2P trading to manipulate the naira via a pump-and-dump strategy.
In February 2024, the Central Bank Governor, Olayemi Cardoso, claimed that $26 billion in transactions were untraceable and processed through crypto on the Binance platform.
This resulted in a crackdown on Binance, and over 1000 bank accounts involved in P2P were frozen. Recently, the NSA ordered and restrained Fintech in Nigeria from creating customer accounts.
To clarify this, on May 2, 2024, the CEO of Moniepoint, Tosin Eniolorunda, released a state of the NSA member at the TMT Business Law conference in Lagos. He said, “Customers can easily open Tier 3 accounts on fintech platforms in seconds.
The NSA found a lot of accounts that were involved in crypto trading] and blocked the accounts. They were worried that fintechs are rapid [in opening accounts] and told us to stop onboarding.”
However, the Central Bank of Nigeria says these easy-to-open bank accounts have given room for evil perpetrators contrarily to traditional banks.
