Key Takeaways
- Nigeria central bank receives a court order to freeze fintech bank accounts
- The development part of motion from the apex bank accusing the fintech firms of illegal operations
- The CBN banned cryptocurrencies in February, but the ban has proven to be ineffective
This development resulted from a judgment given by one of the country's courts which granted a motion filed by the CBN to withhold the affected companies' funds.
It is understood that the four companies are in the financial investment sector and include Bamboo, Trove, Rise Vest, and Chaka technologies limited.
The CBN accuses the fintech firms of operating financial asset management businesses without relevant licenses.
It also claims that the fintech companies' operations contravened a circular issued by the Central Bank in 2015 that prevents Nigerian firms from utilizing locally generated forex to purchase foreign bonds.
Nigeria has faced problems with foreign exchange, which has resulted in the gradual devaluation of the naira.
The country relies on foreign exchange for its import-based economy, which has led to the apex bank placing restrictions on the number of forex citizens can access from their local bank accounts.
The decision by the CBN to freeze the fintech bank account has been met with calm by the companies involved. Rise Vest Technology reassured users that the company would continue operations and resolve the existing problem with the apex bank.
Bamboo also followed a similar path and assured users via its Twitter handle that its legal department was taking a close look at the situation.
The central bank has been proactive in banning unregulated financial activities in the country.
Earlier in February, the CBN banned banks from providing financial services to cryptocurrency firms.
This led to many utilizing P2P services like Remitano to process their trading transactions.
Several months later, it has emerged that Nigeria remains the biggest BTC market in Africa, suggesting that the ban failed.
What do you think of CBN freezing FINTECH accounts?
