Nigerian Fintechs Take Stand Against Crypto: Users Feel the Heat

• Nigerian fintechs, including Moniepoint, PalmPay, and Paga, tighten measures against crypto.
• Users face account blocks as Nigerian fintech platforms enforce CBN directives.
• Moniepoint notifies customers of account closure for engaging in crypto transactions.

Several Nigerian fintech platforms, including Moniepoint, PalmPay, and Paga, have intensified their measures against cryptocurrency transactions. These actions align with directives from the Central Bank of Nigeria (CBN). Users of these platforms now face the risk of having their accounts blocked if they engage in crypto-related activities.

On May 2, 2024, Moniepoint issued a notification to its customers. It stated that accounts involved in crypto transactions would be closed. It also mentioned that user details would be shared with relevant authorities. This step follows CBN’s guidelines for regulating the digital currency space.

Similarly, PalmPay and Paga have also communicated to their customers the risks of engaging in cryptocurrency transactions. A user of PalmPay reported that his account was frozen due to such activities. The account will only be unfrozen if he agrees to abstain from any future crypto transactions.

In a recent email, Paga reiterated its commitment to adhering to CBN’s regulations. They reminded their customers that transactions in cryptocurrency are strictly prohibited. This is in compliance with a 2017 CBN circular. The circular warns financial institutions about their interactions with crypto exchanges and individuals transacting in cryptocurrencies.

In December 2023, the CBN seemed to soften its stance on cryptocurrencies. It issued a circular allowing financial institutions to open accounts and provide services for crypto firms. This circular also claimed to supersede previous ones from 2017 and 2021. However, recent actions by fintech firms suggest a more stringent application of the rules.

Earlier, Coinedition media reported on directives from the CBN to all banks and financial institutions. They were instructed to identify and monitor individuals or entities transacting with cryptocurrency exchanges. According to these directives, such accounts must be placed under a Post No Debit (PND) instruction for six months.

Under the PND instructions, customers are prohibited from performing certain transactions. These include withdrawing funds or making payments. The CBN also identified several crypto exchanges such as Bybit, KuCoin, OKX, and Binance. These platforms are said to lack the necessary operational licenses in Nigeria.

This move is part of a broader effort by the Nigerian government to regulate the cryptocurrency market. The government aims to prevent potential risks associated with unregulated digital currencies. These risks include money laundering and other illegal activities.