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Growing concerns have emerged among Nigerian residents following the CBN’s crackdown on crypto assets.
The National Security Adviser (NSA) of Nigeria classified cryptocurrency trading as a national security issue, leading to actions taken by several fintech startups in the country.
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Notably, Opay, Moniepoint, Paga, and Palmpay have decided to block accounts of customers engaging in cryptocurrency transactions and report such activities to law enforcement agencies.
This move follows the Central Bank of Nigeria (CBN) barring prominent fintech companies, including Kuda, Opay, PalmPay, and Moniepoint, from accepting new clients.
The CBN’s action stems from ongoing assessments of these fintech companies’ Know-Your-Customer procedures due to concerns related to money laundering and terrorism financing.
Despite Nigeria ranking second globally in Bitcoin interest, the government has prohibited banks from providing services to cryptocurrency customers.
This stance has been attributed to concerns about the depreciation of the naira, especially in a country struggling with high inflation. In response, the Economic and Financial Crimes Commission (EFCC) obtained a court order to freeze over 1,100 bank accounts allegedly involved in illicit foreign exchange dealings.
Fintech firm OPay issued a warning to its users, stating severe penalties for engaging in cryptocurrency trading, aligning its policies with the CBN’s position. However, this appears contradictory to the CBN’s previous stance, which had instructed financial institutions to facilitate cryptocurrency transactions.
The situation presents conflicting signals, as the CBN had lifted a two-year restriction on crypto transactions and was reportedly discussing cryptocurrency licenses with the Securities and Exchange Commission (SEC).
Nevertheless, concerns persist among market leaders who view the current measures as counterproductive, particularly as peer-to-peer (P2P) transactions often occur through opaque channels.
Nigeria’s crypto economy, the largest in Africa by trade volume, plays a significant role in the country’s financial landscape, especially among its young and vibrant population.
The recent appointment of Emomotimi Agama as the new Director-General of SEC has sparked optimism within Nigeria’s blockchain community, given his pro-crypto history and expertise in the Nigerian capital market.
