Tuesday, 27th September 2022
<To guardian.ng
Search
Breaking News:

CBN slams ₦800 million fines on banks for flouting cryptocurrency order

By Dennis Erezi
06 April 2022   |   1:04 pm
The Central Bank of Nigeria (CBN) has fined three banks for failing to comply with the directive to block customers from transacting in cryptocurrencies, Bloomberg reported on Wednesday. All three Nigerian banks that violated the CBN's regulation were fined a combined ₦800 million for non-compliance. CBN told banks in a February 2021 circular to close…
Godwin Emefiele

Central Bank of Nigeria governor Godwin EmefielePhoto/TWITTER/GOVWIKE

The Central Bank of Nigeria (CBN) has fined three banks for failing to comply with the directive to block customers from transacting in cryptocurrencies, Bloomberg reported on Wednesday.

All three Nigerian banks that violated the CBN’s regulation were fined a combined ₦800 million for non-compliance.

CBN told banks in a February 2021 circular to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

“Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited, ” the circular signed by Bello Hassan, director for banking supervision, and Musa Jimoh, director of the payment system management department, read.

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

Stanbic IBTC Bank was fined ₦200 million naira for two accounts alleged to have been used for crypto transactions, Chief Executive Officer Wole Adeniyi said Tuesday during an investor conference call in Lagos.

Nigeria’s biggest lender by assets Access Bank Plc was fined 500 million naira for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd. United Bank for Africa Plc incurred a 100 million naira penalty for digital-currency transactions by a customer, it said.

While Stanbic IBTC followed the central bank directive, the transactions it was sanctioned for may have passed through its system undetected, Adeniyi said.

Adeniyi disclosed that the CBN was able to detect the relevant transactions using an “advanced capability” that Nigerian lenders do not have access to, and they have asked the central bank to share the technology.

The bank executive said, “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.”

Before the circular in February 2021, CBN had in January 2017 said digital currencies such as bitcoin, litecoin, and others are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions.

The bank said virtual currencies are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions.

“The attention of bank and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN,” CBN said in a statement at the time.