Opay, PalmPay, others caution clients against trading cryptocurrency

Nigerian fintech firms have threatened to ban any accounts discovered to be involved in cryptocurrency or other virtual currency trading, and they have advised their users against trading in these markets on their apps.

Customers of at least four fintech companies—Opay, Moniepoint, PalmPay, and Paga—were informed of this situation on Friday.

The Central Bank of Nigeria barred prominent fintech companies, including Kuda, Opay, PalmPay, and Moniepoint, from accepting new clients last week.

The CBN’s action was related to a continuous assessment of the fintech companies’ Know-Your-Customer procedures. These companies have been under investigation in recent months due to worries about money laundering and financing of terrorism.

Prior to the direction from the CBN, a court order had been obtained by the Economic and Financial Crimes Commission to freeze at least 1,146 bank accounts belonging to different people and businesses that were allegedly engaged in illicit foreign exchange operations.

OPay warned in a notification on Friday that it would impose severe penalties on users who disobey its policies, which are in line with the Central Bank of Nigeria’s position on cryptocurrency trading.

Please be aware that OPay forbids the trade of any virtual money, including cryptocurrencies, in accordance with the instruction issued by the CBN. Any account that engages in these kinds of activities will be closed, and regulatory authorities will receive access to client information.

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

In a similar approach, Paga, a fintech company that has handled $32 billion in transactions over the course of its 15 years of business, sent out an email to its clientele, requesting that they make sure their accounts are not being used for cryptocurrency and virtual currency transactions. Paga accounts that break this rule would be closed, it stated.

PalmPay, another major player in an emailed statement said, “We strongly advise against using your PalmPay account for transactions involving cryptocurrencies or any other virtual assets. Please be advised that failure to comply with these regulations may result in the suspension of your account.

“Our team is diligently working to ensure full compliance with all regulatory directives, prioritizing the stability and integrity of our platform,” the fintech stated.

Tosin Eniolorunda, the founder and CEO of Moniepoint, urged cryptocurrency peer-to-peer (P2P) users to stop their operations on Thursday in Lagos, citing the financial sector’s ban 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.

The regulatory scrutiny that the fintech industry is subject to was highlighted recently when prominent figures in the field were called to Abuja to discuss KYC processes.

In February, the apex bank launched an investigation on cryptocurrency exchange Binance following allegations of naira exchange rate manipulation.

CBN Governor Olayemi Cardoso stated that in a single year, unknown sources moved no less than $26 billion through Binance Nigeria before Binance ceased operations.

The Office of the National Security Adviser (ONSA) and the CBN announced a collaboration to look into and punish those engaged in illegal activity in the foreign exchange market.