In a surprising turn of events, the Central Bank of Nigeria (CBN) has directed four major fintech companies, including OPay, Palmpay, Kuda Bank, and Moniepoint, to cease onboarding new customers. This directive comes amidst allegations of these platforms being used for illicit foreign exchange transactions, a development that has stirred significant attention and speculation within the financial sector.
The CBN’s order follows an investigation by the Economic and Financial Crimes Commission (EFCC) into illegal activities primarily linked to traditional banks. The move has raised concerns about regulatory bias favoring established institutions over fintech companies, despite the latter often having more stringent Know Your Customer (KYC) practices and being less frequently the site of significant fraud losses.
The EFCC has secured a judicial order to freeze over 1,100 bank accounts due to illegal forex dealings, money laundering, and terrorism financing, with the majority of implicated accounts being linked to conventional banking institutions. This ongoing investigation aims to address the misuse of cryptocurrency platforms for naira value manipulation and money laundering, with the court granting 90 days to complete the probe.
Representatives from the affected fintech firms have expressed concerns that the directive might be misdirected, as the majority of the implicated accounts belong to commercial banks rather than fintech platforms. This discrepancy has led to questions about the fairness and effectiveness of the CBN’s decision.
The CBN’s directive to halt new customer onboarding for these fintech companies has sparked a broader conversation about the regulatory landscape for Nigeria’s burgeoning fintech sector. As the investigation unfolds, the future of these platforms and their role in the country’s financial ecosystem remains uncertain.
In the meantime, customers of OPay, Moniepoint, Kuda Bank, and Palmpay are advised to stay informed about any updates from the companies and the CBN regarding the resumption of new customer onboarding.
