Forex Deals: CBN Clamps Down On Fintech Firms

By Tosin Olatokunbo

The Central Bank of Nigeria, CBN has been granted an order of a federal high court in Abuja to freeze accounts of six fintech companies for 180 days for illegally transacting foreign exchange.

The apex bank has recently stopped selling foreign exchange to Bureau de change, BDC in the country after the Godwin Emefiele-led government bank accused them of roundtripping.

Firms whose accounts were frozen are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

According to the details from the courts, the CBN said the time will allow for thorough investigations of the companies.

In the motion ex parte marked FCH/ABJ/CS/822/2021 and filed on August 4, CBN through its counsel Michael Kaase Aondoakaa, submitted that “the investigation being carried out concerns what has been discovered to be serious infractions by the defendants/respondents in connection with some foreign exchange transactions, and non-documentation by the defendants/respondents in violation of the extant laws and regulations, particularly the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank of Nigeria foreign exchange manual.”

“That more specifically, there is a grave allegation that the defendants/respondents are engaged in illegal foreign exchange transactions, accessing/procuring of foreign exchange via their banks from the Nigerian foreign exchange market via several bureaux de change, international money transfer operators and have transferred cash deposit of more than S10,000.00 (Ten thousand dollars) to various accounts overseas contrary to provisions of extant laws and regulations and also traded in foreign securities and cryptocurrencies in contravention to CBN Circular referenced TED/FEM/FPC/GEN/01/012 and BSD/DIR/PUB/LAB/014/001 dated February 5, 2021, and July 01, 2015.

“It is evident that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited are complicit in operating without license as asset management companies and utilising FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of CBN’s directive.”

In his ruling, Justice  Ahmed Mohammed said: “having listened to senior counsel to the applicant, on the motion ex parte filed in August, it is granted as prayed.”

The judge, however, urged the firms to challenge his order in any competent court if they are not satisfied.