Nigerian Central Bank Sanctions Banks for Enabling Crypto Transfers

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The sanctions are a part of CBN’s efforts to discourage cryptocurrency usage and to firmly establish commercial restrictions on cryptocurrency trading.

Three banks have been penalized by Nigeria’s Central Bank (CBN) for failing to comply with a regulation that prohibited consumers from trading in cryptocurrencies.

CBN’s Sanctions

According to the latest Bloomberg report, the financial institutions were fined for breaching a cryptocurrency trading restriction levied a year ago. Stanbic IBTC Bank, which is the national unit of Standard Bank Group Ltd. was fined 500mnaira by CBN for two accounts that were allegedly used for crypto transactions.

The filing with Nigerian Exchange Ltd alleged that the country’s biggest lender Access Bank Plc was imposed a penalty of 100 million naira for failure to terminate user crypto accounts. United Bank for Africa (UBA), was penalized 100 million naira for digital-currency transactions made by a customer. Fidelity Bank Plc was the commercial bank that is fully licensed, and was fined 14.3 millions naira.

Wole Adeniyi was the chief executive officer of Stanbic IBTC. He stated that the central bank regulation was followed, but that the sanctioned transaction may have gone unnoticed. Adeniyi also said that the central bank was able to identify the relevant transactions due to “advanced capability” that even the lenders in the country do not have access to. The platform has asked the central bank for the technology. According to the exec,

“It doesn’t seem that they are going to entertain a refund, but they are now sharing intelligence with us to be able to kind of deter clients.”

Nigerian Crypto Climate

Nigeria isn’t particularly crypto-friendly. However, the West African nation is the home to the highest volume of cryptocurrency transactions outside of the United States. The continent’s most populous country also accounts for the largest proportion of retail users executing transactions under $10,000, according to the blockchain intelligence platform, Chainalysis.

CBN issued an order in February to close accounts of holders who were involved in the operation or transacting in cryptocurrency exchanges. The circular was sent by the apex bank to all domestic financial institutions and warned them of severe regulatory sanctions for failing to comply.

Eight months after the ban, Nigeria’s financial regulator – Securities and Exchange Commission – had announced setting up a research unit as part of its effort to regulate the industry.

 

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