Some Nigerian fintech platforms are cautioning users against conducting cryptocurrency transactions through their accounts, warning of severe penalties for non-compliance, as the country intensifies its efforts to regulate cryptocurrencies.
Fintech companies Moniepoint, PalmPay, and Paga have all notified their customers that engaging in crypto transactions using their platforms will result in account blocks. Moniepoint, in a notice to customers dated May 2, 2024, explicitly stated its intention to close the accounts of individuals involved in cryptocurrency or virtual asset dealings, in compliance with CBN regulations.
This development represents a reversal from the Central Bank of Nigeria's (CBN) previous stance. While the CBN had lifted a cryptocurrency ban imposed in 2021, recent actions suggest a tightening of regulations. A notice issued by the central bank in December 2023 instructed financial institutions to facilitate corporate account openings and designated settlement services, superseding earlier notifications restricting banks from serving cryptocurrency service providers.
Instances of account freezes and mandates against cryptocurrency transactions have been reported by users of platforms like PalmPay. One PalmPay customer reported that their account was frozen and could only be reinstated upon agreeing to refrain from crypto-related activities. Similarly, Paga informed its customers via email about its commitment to regulatory compliance, citing a 2017 CBN notification cautioning against cryptocurrency trading and facilitation.
Despite recent actions, the CBN has denied reports of issuing directives to banks and financial institutions to identify and restrict transactions with cryptocurrency exchanges. The alleged directive involved placing a "Post No Debit" restriction on identified accounts for six months. Additionally, regulated financial institutions are prohibited from engaging in cryptocurrency transactions or facilitating payments for such activities, as outlined in the CBN notice.
