Saturday, July 20, 2024
Saturday, July 20, 2024

OPAY, Palmpay, Others Crack Down on Crypto following CBN Directive

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In a move aligning with the Central Bank of Nigeria’s (CBN) recent stance, several fintech companies have issued warnings to their customers regarding cryptocurrency trading.

These companies, including OPay, PalmPay, Moniepoint, and Paga, have informed users that crypto transactions are prohibited on their platforms.

The warnings come after the CBN reportedly directed these fintech firms to halt onboarding new customers last week. This latest development suggests a tightening of regulations around cryptocurrency activity in Nigeria.

According to OPay’s statement, any accounts found engaging in crypto trading will be blocked, and user information could be forwarded to the regulators.

Similar messages were issued by the other fintech companies, emphasizing compliance with the CBN’s directive.

In a notice issued on Friday, OPay said it would take strict measures against customers who violate its policy, which aligns with the Central Bank of Nigeria’s stance on cryptocurrency trading.

“In compliance with the CBN directive, please note that OPay prohibits any cryptocurrency and all virtual currency trading. Any account engaging in such activities will be closed, and customer information will be shared with regulatory authorities.

“Please ensure that your account does not involve any cryptocurrency or any other virtual currency transaction,” the fintech firm warned.

In a similar move, Paga, a fintech firm that has processed transactions worth $32bn in 15 years of operation, said in an email to its customers, “As a Paga account holder, please ensure that your account is not used for crypto and virtual currency transactions. Paga accounts in violation of this regulation will be blocked,” it said.

On Thursday in Lagos, the founder and CEO of Moniepoint, Tosin Eniolorunda, called on cryptocurrency peer-to-peer (P2P) participants to halt their activities, citing the financial sector regulator’s prohibition on such transactions.

“This is a self-reflection of our industry. As you know, fintech apps are used for fraud. One of the things that led to the most recent announcement is that crypto players were manipulating the naira, especially with the P2P market,” he said.

Last week, the Central Bank of Nigeria stopped major fintech firms like Kuda, Opay, PalmPay and Moniepoint from onboarding new customers.

The CBN’s move was linked to an ongoing audit of the Know-Your-Customer process of the fintechs, which have been under scrutiny in recent months over concerns around money laundering and terrorism financing.

Before the CBN’s directive, the Economic and Financial Crimes Commission had obtained a court order to freeze at least 1,146 bank accounts owned by various individuals and companies allegedly involved in illegal foreign exchange transactions.

It follows a period of increased scrutiny towards fintech companies in the country. Speculation suggests concerns about potential disruption to the foreign exchange market by crypto traders using these platforms.

This move is likely to impact Nigerians who have been using these fintech apps to access the cryptocurrency market. The extent of these restrictions and the long-term implications for cryptocurrency trading in Nigeria remain to be seen.

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