CBN Fines Four Banks Over Crypto Transactions

The Central Bank of Nigeria (CBN) has fined four commercial banks N814.3 million for failing to comply with its directive to close cryptocurrency accounts.

The four banks were fined for non-compliance with regulatory directive on closing accounts of crypto currency traders.

CBN had in February last year asked banks 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, ” a circular by Bello Hassan, director for Banking Supervision, and Musa Jimoh, director, Payment System Management Department, read.

The apex bank had directed that the banks should identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

One of the banks was fined N200 million for two accounts alleged to have been used for crypto transactions. The second was fined N500 million for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd.

Another Tier-1 bank was also fined N100 million and the forth, N14.3 million for not complying with the CBN’s directive to close accounts of crypto currency traders.

While the bank that was fined N200 million followed the central bank’s directive, the transactions were said to have passed through its system undetected.

The bank’s helmsman said that the CBN was able to detect the transactions using an “advanced capability” that Nigerian lenders do not have access to.

The bank chief added that organisation has asked the CBN to share the technology.

He said that “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.”

The CBN had earlier 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,” the CBN said in a statement at the time.