CBN Fines FCMB N400m For Facilitating Illegal Businesses

CBN has fined FCMB N400 Million and Fidelity Bank N14.28 Million for Facilitating illegal crypto businesses in Nigeria.

Truetells Nigeria reports that the Central Bank of Nigeria has fined First City Monument Bank (FCMB), Fidelity Bank Plc and one other commercial bank a whopping N514 million.

This online news outlet understands that the fine was for failing to comply with regulations prohibiting customers from transacting in cryptocurrencies.

This pushes the total fines for contravening the CBN circular on cryptocurrency to a massive N1.315 billion for 6 Nigerian banks. Based on data obtained by Truetells Nigeria.

Truetells Nigeria reports that the apex bank had earlier fined three Nigerian commercial banks a total of N800 million. For failing to comply with regulations prohibiting consumers from transacting in cryptocurrencies.

BREAKDOWN OF THE CRYPTO FINES

First City Monument Bank (FCMB) was also fined N400 million by the Central Bank of Nigeria (CBN) over its failure to close four accounts of customers said to be involved in cryptocurrency.

Fidelity Bank Plc received a sanction of N14.28 million for cryptocurrency infractions, the bank said in its 2021 audited financial statement.

CBN penalized Stanbic IBTC Bank, the local unit of Standard Bank Group Ltd., N200 million for two accounts allegedly used for crypto transactions.

WHAT YOU NEED TO KNOW

Central Bank Of Nigeria issued a circular on February 5, 2021. Warning and reminding local financial institutions against conducting crypto transactions or enabling payments for crypto exchanges.

However, CBN directed financial institutions to close the accounts of anyone participating in or operating cryptocurrency exchanges immediately.

Violations of the CBN directive resulted in a loss of N1.314 billion for 6 Nigerian banks.

The CBN has ignored pushback against its crypto regulation and has advised Nigerians to adopt its CBDC, the eNaira.

CBN fines three banks N800m over crypto transactions

Also the Central Bank of Nigeria has imposed an N800m fine on three Deposit Money Banks in the country for violating regulations barring customers from transacting in cryptocurrencies.

According to a Bloomberg report released on Wednesday, the three banks are Access Bank Plc, Stanbic IBTC, and the United Bank for Africa Plc.

The report noted that the penalties were part of efforts by the apex bank to ensure that banks implement an order to block trading in cryptocurrencies due to the threat they pose to Nigeria’s financial system.

The directive was contained in a circular issued by the CBN in February 2021.

In addition, the CBN had in November directed banks to close the accounts of two individuals and a company for allegedly trading in cryptocurrencies.

Despite these regulations, Nigeria accounts for the largest volume of cryptocurrency transactions outside the United States., according to Paxful, a Bitcoin marketplace.

The country also has the largest proportion of retail users conducting crypto transactions under $10,000, Chainalysis says.

The report stated that Access Bank was fined N500m for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Limited while UBA incurred a N100m penalty for digital-currency transactions by a customer.

It said that the Chief Executive Officer, Stanbic IBTC, Wole Adeniyi, during an investor conference call in Lagos on Tuesday revealed that his bank was fined N200m ($478,595) for two accounts alleged to have been used for crypto transactions.

 

Adeniyi said that while Stanbic IBTC followed the apex bank’s directive, the transactions it was sanctioned for might have passed through its system undetected.

 

He noted that the CBN was able to detect the relevant transactions using an “advanced capability” that Nigerian banks don’t have access to, and they’ve asked the apex bank to share the technology.

 

“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 added.