Cryptocurrency, News, Regulation

Central Bank Of Nigeria Penalize Commercial Banks For Going Against Crypto Legislation

The Central Bank of Nigeria recently penalized four popular commercial banks for allegedly aiding digital currencies earlier in 2021. As per a report by Bloomberg, the banks that were penalized are Access Bank Plc, Fidelity Bank Plc, Stanbic IBTC Bank, and United Bank for Africa Plc. They failed to abide by regulations barring customers from carrying out crypto transactions.

The Bank of Nigeria is levying fines such as these to see that lending institutions adhere to a regulation released in February last year that prohibits cryptocurrency trading owing to the damage that CBN feels it poses to the country’s financial system.

The Central bank Used Modern Technology To Uncover Crypto transactions

In a meeting with investors on Tuesday, Wole Adeniyi, the CEO of Stanbic IBTC said on Tuesday that the country’s Central Bank fined their local subsidiary N200 million ($478,595) for two customers accounts that were allegedly used for cryptocurrency transactions.

Although the commercial bank had taken all necessary precautions to ensure compliance with the CBN rule forbidding digital currencies transactions beginning in 2021, Adeniyi informed shareholders that the bank’s computing system failed to detect two accounts linked to cryptocurrency vendors.

However, CBN identified both accounts with the aid of modern technology that was not available to Stanbic IBTC Bank. In his opinion, “it seems that they would not consider a reimbursement, but they are currently sharing information with us in order to stop customers.”

Commercial Banks Asked To Pay Huge Fines

According to a filing with Nigerian Exchange Limited, Access Bank, the country’s top lender regarding assets, was asked to pay 500 million for refusing to close customers’ cryptocurrency accounts on time. In response to a client’s cryptocurrency activities, United Bank for Africa Plc was charged $100 million, while Fidelity Bank was fined $14.3 million.

Remember that CBN had urged banks to freeze all accounts used by cryptocurrency traders last year. As a result of the legislative change, which affected almost all crypto marketplaces operating in the country, the regulation drew widespread condemnation as several Nigerians lost funds in their bank accounts.

It should be emphasized that the campaign of CBN against cryptocurrencies is taking place even when the country has the second-largest amount of crypto transactions globally, behind only the US in terms of volume. According to a Chainalysis report, the country also has the most significant percentage of retail crypto traders who make payments daily. Nigerians can only hope that the country releases less stringent laws towards cryptocurrency in the future.

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