Moniepoint and Paga have informed their customers that they will face account blocking if they engage in cryptocurrency transactions. This decision follows the directive from the Central Bank of Nigeria (CBN) instructing certain banks, including Moniepoint, to halt new customer onboarding. This notification marks a significant reversal from the CBN’s previous announcement to lift the crypto ban implemented in 2021. Moniepoint’s message to customers, sent on May 2, 2024, stated, ‘In accordance with CBN regulations, we will shut down accounts of individuals involved in virtual asset transactions and share their information with relevant authorities.’ Similarly, Paga emphasized its CBN license and commitment to adhering to all CBN regulations in an email to customers.
“Pursuant to the CBN circular with reference FPR/DIR/GEN/CIR/06/10, we wish to remind you that dealing in or facilitating transactions in cryptocurrency and other virtual currencies is not permitted.’
The circular cited by Paga dates back to 2017, cautioning banks and other financial institutions regarding their involvement with crypto exchanges and customers conducting cryptocurrency transactions. However, a recent circular issued by the Central Bank of Nigeria (CBN) in December 2023 outlined a different approach. This newer directive instructed financial institutions to open accounts, offer designated settlement accounts and services, and serve as conduits for foreign exchange inflows and transactions for companies dealing in crypto assets. Significantly, the 2023 circular supersedes both the 2017 directive and the 2021 circular that restricted banks and other financial entities from engaging in account operations for cryptocurrency service providers.
Given these developments, the recent announcements by Moniepoint and Paga suggesting a crackdown on cryptocurrency transactions could indicate a potential reinstatement of the crypto ban initially imposed in 2021 by the Central Bank of Nigeria (CBN).
It’s noteworthy that the financial institutions instructed by the CBN have been taking proactive measures in line with potential regulatory shifts regarding crypto activities. This suggests a significant shift in policy stance within the financial sector, potentially reverting to stricter regulations regarding cryptocurrency transactions in Nigeria.
Tosin Eniolorunda, the founder and CEO of Moniepoint, while addressing the audience at the Duale, Ovia, and Alex-Adedipe, TMT Business Law breakfast series 2024, on Thursday, May 2, 2024, urged participants in crypto Peer-to-Peer (P2P) transactions to halt their activities due to the prohibition within the financial sector. He added that some P2P crypto activities were a potential factor in the naira’s manipulation. He said: ‘This is a self-reflection of our industry. As you know, fintech apps are used for fraud. One of the things that led to the most recent announcement is that crypto players were manipulating the naira, especially with the P2P market.’
This call for cessation aligns with Moniepoint’s recent actions to comply with regulatory directives regarding cryptocurrency transactions, indicating a concerted effort to adhere to evolving regulatory frameworks in Nigeria’s financial landscape.