Bank of Nigeria accuses fintech firms of violating Forex Regulations

Thu 19 Aug 2021 ▪ 15h14 ▪ 3 min read — by Susan McCormack

Private fintech companies showed record high international growth in the first half of 2021. In this regard, regulators are doing their best to protect the traditional financial system from destabilisation. 19th August, the Central Bank of Nigeria (CBN) froze bank accounts of four fintech firms for up to 180 days.

Investigation demands frozen accounts

According to the report, the temporary freezing of bank accounts will allow CBN to conduct investigations on the activities. Meanwhile, the Nigerian media has disclosed the companies’ names: Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited.

The report suggests that the accounts were blocked after the companies’ illegal activities had been proven. The Central Bank accuses the fintech firms “of utilising forex sourced from the Nigerian forex market for purchasing foreign bonds/shares in contravention of the CBN circular dated July 01, 2015.”

Over the last few years, Nigeria has been facing the naira devaluation. Therefore, in response to the lowering exchange rate, the Central Bank has introduced restrictions on the amount of foreign currency that Nigerian citizens can withdraw from the bank.

Fintech firms unperturbed

CBN is trying to stabilise the situation in the domestic market by blocking the access of crypto companies to the country’s banking system. However, despite the tough measures, the naira continues to lose ground against major currencies. By the time of this publication, the exchange rate of the Nigerian national currency against the US dollar is 0.002444.

Meanwhile, the Nigerian prosecutor, speaking in court against fintech companies, linked the weakening naira to their illegal activities. He believes there is a need to block 15 accounts for about 180 days.

The CEO of Rise Vest Technologies Limited has stated that the company will continue its trading activities as usual. Bamboo Systems also twittered about the ongoing negotiations with the regulators.

February 2021, the Central Bank of Nigeria demanded to close all the bank accounts of cryptocurrency users. Later, Nigerian fintech firms suddenly found themselves disconnected from the state system necessary to conduct mandatory user identity verification.

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Susan McCormack avatar
Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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