Fintechs Shut Down 105 Accounts as CBN Gives New Order to Moniepoint, Palmpay, Others
- Some fintechs have frozen a total of 105 accounts because they were allegedly linked to unauthorised transactions
- The accounts are frozen for ninety days to allow investigations as per a court injunction issued on April 24
- This comes after the CBN recently ordered that some fintechs temporarily stop accepting new accounts
A total of 105 accounts linked to unauthorised foreign currency transactions, money laundering, and financing of terrorism have been frozen by nine fintech businesses.
Source: Getty Images
This comes after the Economic and Financial Crimes Commission (EFCC) applied to an Abuja Federal High Court.
On April 24, 2024, the court issued an interim injunction freezing the accounts for ninety days while the investigations were ongoing.
The fintechs impacted include Fairmoney Microfinance Bank (6), VFD (2), Kuda Microfinance Bank Ltd (27), Opay Digital Services (43), Carbon MTB (7), MoMo Payment Service Bank (1), Pagatech (8), PalmPay Ltd (5), and Moniepoint (6).
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EFCC makes move
The EFCC is looking into 1,146 bank accounts that may be used for currency racketeering; these frozen accounts are a part of that probe.
The EFCC believe that some of these accounts' owners used cryptocurrency platforms to influence the value of the naira relative to the US dollar.
About 300 accounts were earlier frozen because they were linked to illicit peer-to-peer trading, according to information provided by EFCC Chairman Ola Olukoyede to journalists a few weeks ago.
He clarified that, in the previous year, more than $15 billion was transferred through an unidentified FX platform in violation of financial regulations.
Meanwhile, a number of fintech companies, including OPay, Moniepoint, PalmPay, and Kuda Bank, have temporarily stopped accepting new accounts in the wake of these account freezes.
According to people who spoke to BusinessDay, who were aware of the situation, the fintech companies were advised to halt accepting new clients while the Central Bank of Nigeria assessed they're Know Your Customer procedure in relation to the ongoing probe into unauthorised foreign exchange transactions.
A source said:
“There was a meeting last week with the Office of the National Security Adviser, and we all agreed to support the government’s drive. We were one of the first to stop onboarding. However, the real issue is that most of these accounts are domiciled in commercial banks. Only about 10 percent of them are fintech accounts, and we were the ones that were asked to stop onboarding.”
OPay sends message to customers
Legit.ng reported that Opay, a leading financial services provider in Nigeria, has reassured its customers regarding the security of their funds.
In a statement on its X account on Tuesday, April 30, 2024, the bank said it's committed to fighting illegal financial activities in the country.
It restated its commitment to promoting financial inclusion and economic growth as key players in Nigeria's financial ecosystem.
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Source: Legit.ng
