In a move aimed at curbing illicit foreign exchange dealings and money laundering activities, the Central Bank of Nigeria (CBN) has directed several prominent fintech companies, including Kuda Bank, Moniepoint, OPay, and Palmpay, to temporarily halt the onboarding of new customers. This directive comes in the wake of the Economic and Financial Crimes Commission (EFCC) freezing 1,146 bank accounts allegedly linked to unauthorized forex transactions.

The affected fintech firms have complied with the CBN’s order, displaying notices on their platforms informing potential customers that new account signups have been temporarily paused. However, existing customers’ deposits and banking activities remain unaffected by this measure

“Hello! We’ve temporarily paused new sign-ups on our platform,” read a message on Moniepoint’s platform. “This means that you’ll be unable to open a new account at the moment. We apologise for any inconvenience this may cause.“

According to sources familiar with the situation, the CBN’s decision targets fintech platforms suspected of being exploited for cryptocurrency-related transactions and foreign exchange manipulation, activities believed to be contributing to the recent volatility and depreciation of the Nigerian naira.

Earlier this year, the Governor of the CBN, Mr Olayemi Cardoso, claimed that $26 billion passed through Binance in a year from “sources and users who we cannot adequately identify.” This claim was followed by a heavy crackdown on crypto exchange platform, Binance.

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The crackdown follows the EFCC’s investigation into alleged money laundering and terrorism financing connected to the targeted bank accounts. While the court order to freeze the accounts encompasses both commercial banks and fintech firms, industry sources have expressed concerns over what they perceive as a disproportionate focus on fintech platforms.

“If you see the amount of money the banks are losing to fraud, you will marvel. No fintech can lose that amount of money and remain in business,” one industry source remarked, questioning the perceived targeting of fintech companies over their more established counterparts.

The CBN’s directive underscores the intensifying efforts by Nigerian authorities to restore stability to the financial system and combat illicit financial activities. However, the move has also raised questions about the potential impact on financial inclusion and the growth of the country’s grooming fintech sector.