Fintechs Clamp Down on Crypto, Users Face Account Blocks

Several fintech platforms in Nigeria have warned users about connecting their accounts to cryptocurrency transactions or face severe penalties as the country continues its efforts to regulate digital currencies. Moniepoint, PalmPay, and Paga, three Nigerian fintech firms, have notified their customers that their accounts will be blocked if they engage in crypto transactions. This action comes after the Central Bank of Nigeria (CBN) ordered certain banks, including Moniepoint, to stop onboarding new customers. Moniepoint, in a notification to its customers, stated that they would close the accounts of anyone involved in crypto transactions and share their information with relevant authorities, in accordance with CBN regulations. This is a shift from the CBN’s previous announcement to lift the crypto ban imposed in 2021. In December 2023, the CBN issued a circular directing financial institutions to facilitate account opening, settlement services, and act as intermediaries for firms engaged in crypto asset transactions. The circular also superseded previous restrictions on banks and financial institutions from serving crypto service providers. One customer, who is also a PalmPay user, reported that their account was frozen and would only be reinstated if they agreed to abstain from crypto transactions. Paga also sent an email to customers, reiterating its commitment to complying with CBN regulations and stating that dealing in cryptocurrency and other virtual currencies is not permitted. The circular referenced by Paga dates back to 2017 and warns banks and financial institutions about their interactions with crypto exchanges and customers involved in crypto transactions. The CBN previously denied reports of issuing a directive requiring banks and financial institutions to identify individuals or entities involved in crypto transactions and place restrictions on their accounts. The alleged circular also stated that regulated financial institutions engaged in crypto or facilitating payments for crypto exchanges are prohibited. Moniepoint has not responded to requests for comment on the matter.