The Central Bank of Nigeria (CBN) has instructed four fintech companies to halt accepting new customers as part of Nigeria’s push to tighten Know Your Customer (KYC) compliance in both crypto and traditional investing.
Onboarding Halt
OPay, Kuda Bank, Moniepoint, and PalmPay, leading Nigerian fintech firms, have ceased new account creation while an audit of the KYC process is ongoing, reports TechCabal, an African publication. According to a source familiar with the matter, the CBN expressed concerns that crypto traders were exploiting fintech platforms to disrupt the Forex market.
While new signups are temporarily halted, existing customers of these fintech firms can still deposit and transfer funds without disruption, as confirmed by one of the firms. However, new account openings are suspended for now.
The Economic and Financial Crimes Commission (EFCC) recently blocked 1,146 bank accounts involved in unauthorized forex transactions. Though only 10% are linked to fintechs, the majority belong to commercial banks. This action follows previous measures by Fidelity Bank, which halted outgoing transfers to the same fintechs over KYC concerns in October 2023.
Response from Fintechs
Acknowledging the pause in new customer acquisition, an executive from one of the fintechs assured that this measure is temporary. They plan to resume normal operations once the KYC audit concludes.
The CBN leads the ongoing government intervention, supported by the National Security Agency and the EFCC. The move aims to curb fraud incidents like tax evasion and money laundering facilitated by lax KYC requirements.
