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The Central Bank of Nigeria (CBN) has taken decisive action, prohibiting leading fintech platforms like Palmpay, Moniepoint, Opay, and Kuda Bank from onboarding new customers due to concerns related to cryptocurrency transactions and lapses in their Know-Your-Customer (KYC) processes.
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The CBN’s move comes in response to ongoing audits revealing potential vulnerabilities in the fintechs’ KYC procedures, raising alarms about possible money laundering and terrorism financing activities.
Specifically, the CBN has voiced dissatisfaction with the lax KYC standards observed by these platforms, which could potentially facilitate illicit activities such as cryptocurrency manipulation and undermine the stability of the naira.
In tandem with the CBN’s actions, the Economic and Financial Crimes Commission (EFCC) has launched investigations into illegal foreign exchange transactions that have adversely impacted the value of the naira.
As part of these efforts, the EFCC has obtained a court order to freeze over 1,146 bank accounts, predominantly held with fintech operators, linked to suspicious activities.
The CBN’s scrutiny has revealed significant shortcomings in the KYC protocols of fintech giants like Moniepoint and Opay, where accounts were reportedly created without the requisite Biometric Verification Number (BVN) and National Identification Number (NIN). Instead, many accounts were established using unverified phone numbers, highlighting systemic weaknesses in the fintech sector’s compliance measures.
