Nigerian Central Bank Sanctions Banks For Allowing Crypto Transfers
The sanctions are part of CBN’s efforts to discourage the use of cryptocurrency and to firmly establish trade restrictions on cryptocurrency trading.
The Central Bank of Nigeria (CBN) has sanctioned three commercial banks in the country for failing to follow a regulatory directive that prohibits consumers from transacting in cryptocurrencies.
According to the latest Bloomberg report, financial institutions have been fined for violating a cryptocurrency trading restriction imposed a year ago. CBN has fined Stanbic IBTC Bank, which happens to be the national unit of Standard Bank Group Ltd., N500 million over two accounts allegedly used for crypto transactions.
The filing with Nigerian Exchange Ltd alleged that the country’s largest lender, Access Bank Plc, was fined N100 million for failing to terminate users’ crypto accounts. United Bank for Africa (UBA) has been fined N100 million for digital currency transactions made by a customer. Fidelity Bank Plc, the fully-fledged commercial bank, was instead fined N14.3 million.
Managing Director Wole Adeniyi revealed that Stanbic IBTC follows central bank regulations, however, sanctioned transactions may have passed through its system undetected. Adeniyi also said the central bank was able to identify relevant transactions through an “advanced capability” that even lenders in the country do not have access to. The platform urged the central bank to share the technology. The executive speculated:
“It doesn’t look like they’re going to accept a refund, but they’re now sharing intelligence with us so they can kind of deter customers.”
Crypto Climate in Nigeria
Nigeria is not particularly a crypto-friendly nation. But the West African country is home to the largest 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 below $10,000, according to blockchain intelligence platform, Chainalysis.
Last February, CBN issued an order closing the accounts of holders involved in trading or operating cryptocurrency exchanges. The apex bank had sent the circular to domestic financial institutions and warned them of severe regulatory penalties if they failed to comply.
Eight months after the ban, Nigeria’s financial regulator – Securities and Exchange Commission – had announced the establishment of a research unit as part of its effort to regulate the industry.
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