The Central Bank of Nigeria (CBN) imposed fines on four banks ₦800 million ($1.9 million) for allegedly facilitating cryptocurrency transactions back in 2021.
Indeed, Access Bank Plc, Stanbic IBTC Bank, Fidelity Bank Plc, and United Bank for Africa Plc were all penalized by CBN for failing to comply with restrictions prohibiting consumers from transacting with cryptocurrencies, according to a Bloomberg report.
The fines are part of the Bank of Nigeria’s measures to ensure that commercial lenders comply with a February 2021 directive to prohibit cryptocurrency trading due to the harm that the central bank believes they represent to Nigeria’s financial system.
Central bank detected transactions using “advanced capability”
In a conference call with investors on Tuesday, Stanbic IBTC Bank Chief Executive Officer Wole Adeniyi stated the Central Bank of Nigeria penalized the local subsidiary of Standard Bank Group Ltd. ₦200 million ($478,595) for two accounts believed to have been used for crypto transactions.
Adeniyi notified stakeholders that, despite the fact that the bank had done everything necessary to comply with a CBN regulation prohibiting cryptocurrency transactions in 2021, the bank’s systems had failed to discover two bank accounts that were connected to crypto merchants.
Interestingly, the Central Bank of Nigeria was able to identify the two accounts by using advanced technology that Stanbic IBTC Bank did not possess.
“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,” he said.
Customer transactions cost Nigerian banks a fortune
A filing with the Nigerian Exchange Ltd. reveals that Access Bank Plc, the country’s largest lender by assets, was fined ₦500 million for failing to shut clients’ crypto accounts.
One customer’s crypto transactions cost United Bank for Africa Plc ₦100 million in penalties, while Fidelity Bank Plc was penalized ₦14.3 million, according to the lenders.
It’s worth mentioning that the Central Bank of Nigeria had instructed banks to close all bank accounts used by crypto traders in February 2021. The regulation change received significant condemnation since it impacted practically all of the cryptocurrency trading platforms that operated in the West African country.
It should be noted that the CBN’s effort against cryptocurrencies comes despite the fact that Nigeria has the second highest number of cryptocurrency transactions in the world, after only the United States.
According to an analysis by Chainalysis, the nation also boasts the highest proportion of retail cryptocurrency traders who conduct transactions with a value of less than $10,000.