UBA, Others Get CBN’s Hammer Over Secret Crypto Deals

By James orji

The Central Bank of Nigeria, CBN has wielded the big stick on the United Bank for Africa, UBA and other two commercial banks for failure to comply with its regulations on transacting in cryptocurrencies.

Apart from UBA, the other two banks sanctioned by the apex bank are Access Bank and Stanbic IBTC, according to a Bloomberg report. The three erring banks have now been fined N800 million by the Godwin Emefiele-led CBN.

In its circular to banks on February 5, 2021 the apex banks warned commercial banks in the country that aiding customers to trade in crypto currency will attract severe sanctions. It had directed the banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

The circular signed by Bello Hassan, Director, banking Supervision and Musa Jimoh, CBN’s Director, Payment System Management Department, said “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

Bloomberg said the CBN has the capacity to detect cryptocurrency transactions by commercial banks with appropriate sanctions on erring ones.

The management of UBA has yet to make any comment on the issue though a source in the bank said “efforts are ongoing to collate an appropriate response” on the matter.

This, however, is not the first time that the Kennedy Uzoka-led UBA Plc has ignored federal government’s monetary regulations.

In 2016, UBA shunned President Muhammadu Buhari’s directive that all funds belonging to the federal government should be paid into the Treasury Single Account, TSA.

While the president directed that all funds belonging to the federal government be paid into the designated account, it was discovered that UBA concealed a whopping N58.8 billion belonging to the Nigerian National Petroleum Corporation, NNPC.

The bank was later fined N2.9 billion by CBN as a punishment for the act.

The bank is also one of the serial violators of the Cash Reserve Requirement Ratio, CRR, a monetary instrument by CBN to control inflation in the country, experts said.

Meanwhile, the Chief Executive Officer of Stanbic IBTC, Wole Adeniyi, in his response to the cryptocurrency sanction by CBN said at a forum in Lagos that the bank has not violated CBN’s directed over the issue. He claimed that the transactions for which the bank was sanctioned passed through its system undetected.

Adeniyi said the CBN relied on advanced capacity, not available to commercial banks to detect the relevant transactions.

He explained that the CBN is “now sharing intelligence” with banks to be able to discover such transactions.