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The good news is that as of Monday, 3rd of June 2024, the Central Bank of Nigeria (CBN) has lifted the ban and new customers can now open accounts with these Fintechs. OPay and Kuda have already announced the resumption of new account openings, accompanied by stricter Know Your Customer (KYC) guidelines and reinforced measures against cryptocurrency transactions. The ban action, which was announced on April 29, 2024, was part of the CBN’s broader crackdown on unregulated financial activities, particularly in the cryptocurrency space. The temporary ban came after CBN Governor Olayemi Cardoso revealed that a staggering $26 billion from unidentified sources passed through Binance Nigeria, a leading cryptocurrency exchange, within just one year. To lift the onboarding freeze, the CBN set specific conditions for fintech companies to meet by May 20, 2024. These conditions included blocking peer-to-peer cryptocurrency transfers, implementing physical address verification for all account tiers, and enhancing facial verification for customers. When the ban was announced, many Nigerians were curious as to why the ban was placed on the Fintechs that have come to rival the existing traditional banks in Nigeria on ease of use and speed. There were speculations that there may be a corporate gang-up by the big banks to choke the Fintechs out of business. These speculations made the CBN Governor Olayemi Cardoso announce at the end of the 295th Monetary Policy Committee (MPC) meeting that the central bank did not revoke any fintech banks’ licenses, providing reassurance to the industry. He added that the ban on the four fintech banks would be lifted soon.
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And true to its promise, the ban has been lifted. Kuda announced the resumption of new customer sign-ups following the CBN’s directive on their X account. The company stated,
“As you probably already know, we’ve been working with the CBN to meet recent regulatory requirements by putting more account controls in place. Based on the work we’ve done, we’ll resume signing up new customers this week.”Kuda has also set specific requirements for opening a Tier 3 account, including providing a National Identification Number (NIN), Bank Verification Number (BVN), and proof of address, which will be subject to address verification. Similarly, OPay, in a post on its X handle stated,
“We are thrilled to announce that the Central Bank of Nigeria has given OPay the thumbs up to resume onboarding new users. This milestone highlights our dedication to following the rules, keeping your information safe and secure, and preventing any shady activities.”Earlier on Sunday, June 2, 2024, OPay issued a statement reiterating its compliance with CBN on the prohibition of cryptocurrency transactions and virtual assets trading on its platform. OPay’s CEO, Mr. Gotring Dauda, clarified,
“For absolute clarity, OPay has never condoned, nor will it permit, the trading of cryptocurrency or virtual assets on its platform.”OPay emphasized that it does not permit trading in any form of cryptocurrency or virtual currency on its application, and warned that OPay accounts and wallets must not be used in connection with such activities. The company revealed that it conducts daily scans of its platform to detect unauthorized cryptocurrency or virtual currency trading, and any account or wallet found in breach of this policy will be closed immediately, with details reported to the relevant regulatory authorities.
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The stricter KYC measures implemented by OPay, Kuda, and other fintech firms in Nigeria are aimed at enhancing transparency, combating financial crimes, and ensuring compliance with regulatory requirements. This is important as the fintech industry has continued to attract large patronage in Nigeria, hence the need to prioritize customer protection and maintain a robust compliance framework.
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