CBN Cracks Down on OPay, Kuda, Moniepoint, Palmpay

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CBN, EFCC, forex, Kuda bank, Moniepoint, Nigerian Fintechs, Opay , Palmpay

The Central Bank of Nigeria (CBN) has taken decisive action against several fintech companies, including Moniepoint, Opay, and Kuda Bank, by prohibiting them from opening new accounts and accepting new customers. The move comes amidst allegations of these institutions being involved in cryptocurrency funneling and manipulation of the naira’s value. Sources familiar with the matter, speaking anonymously to the Peoples Gazette, revealed that the CBN’s decision aims to curb money laundering activities, which have contributed to the recent decline of the naira against the dollar.

As of Monday evening, the naira was trading at N1350 against the dollar, marking a regression from its previous upward trend. This development underscores the urgency for regulatory measures to address illicit financial practices within the banking sector. Additionally, the CBN has issued directives to four prominent fintech companies—OPay, Palmpay, Kuda Bank, and Moniepoint—to suspend onboarding new customers pending further investigations.

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Representatives from these fintech firms have acknowledged the CBN’s directive but raised concerns about its focus on fintechs rather than commercial banks, where the majority of implicated accounts are held. Notably, recent reports indicate that the Economic and Financial Crimes Commission (EFCC) has secured court orders to freeze over 1,100 bank accounts allegedly involved in illegal foreign exchange transactions. The EFCC’s investigation targets various offenses, including money laundering and terrorism financing.

In response to the CBN’s actions, industry insiders speculate about the underlying dynamics between banks and fintechs in regulatory oversight. While fintechs are often scrutinized for compliance issues, some argue that banks maintain a closer relationship with regulatory authorities. Despite this, fintechs have made strides in implementing robust Know Your Customer (KYC) protocols compared to traditional banks.

The prevailing challenges highlight the need for collaborative efforts between regulatory bodies, financial institutions, and fintech companies to strengthen anti-money laundering measures and safeguard the integrity of Nigeria’s financial system. As the investigation unfolds, stakeholders must prioritize transparency and accountability to restore trust and stability in the currency market.

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