It emerged on Friday that six banks were fined N1.315 billion by the Central Bank of Nigeria (CBN) in fiscal year 2021 for failing to comply with regulations prohibiting their clients from trading cryptocurrencies.
In the latest full year 2021 financial report disclosure from banks, First City Monument Bank (FCMB), Fidelity Bank Plc. and Wema Bank were fined a total of N514 million crypto violations.
The FCMB was fined N400 million for failing to close four customer accounts that were allegedly involved in cryptocurrency trading.
fidelity bank plc. received a N14.28 million penalty for cryptocurrency breaches, the bank said in its 2021 audited financial statement.
Wema Bank was fined N100 million for contravening the CBN circular on cryptocurrencies.
It also emerged earlier in the week that the CBN had imposed a fine of N800 million on three banks: Access Bank Plc., Stanbic IBTC and United Bank for Africa Plc. – also for violating regulations that prohibit customers from transacting in cryptocurrencies.
The UBA was fined N100 million for a client's digital currency transactions. Access Bank Plc. was fined N500 million for failing to close clients' crypto accounts, according to a filing with Nigerian Exchange Limited.
Stanbic IBTC Bank was fined N200 million for two accounts allegedly used for crypto transactions.
The total penalties imposed so far for contravening the CBN circular on cryptocurrencies is N1.315 billion for the six banks.
The major bank issued a circular on February 5, 2021, warning and reminding local financial institutions not to conduct crypto transactions or allow payments for crypto exchanges.
It ordered financial institutions to close the accounts of anyone participating in or operating cryptocurrency exchanges immediately.
The CBN has ignored the backlash against its crypto regulation and has advised Nigerians to adopt its CBDC, eNaira.
The sanctions are part of the major bank's efforts to ensure that banks implement an order to block cryptocurrency trading due to the threat they pose to Nigeria's financial system.
Despite these regulations, Nigeria accounts for the largest cryptocurrency transaction volume outside of the United States, according to Paxful, a Bitcoin marketplace.
The country also has the highest proportion of retail users transacting crypto below $10,000, says Chainalysis.
Stanbic IBTC CEO Wole Adeniyi, during a conference call with investors in Lagos last Tuesday, confirmed that his bank was fined N200 million for two accounts allegedly used for cryptocurrency transactions.
Adeniyi said that while Stanbic IBTC followed the lead bank's directive, the transactions he was penalized for could 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 do not have access and have asked the main bank to share the technology.
"It doesn't look like they're going to consider a refund, but now they're sharing intelligence with us so we can deter customers," he added.
Bennett Oghifo
