The Economic and Financial Crimes Commission (EFCC) has coordinated the suspension of 105 fintech accounts across nine companies as part of a massive crackdown on financial crimes. These accounts are purportedly linked to money laundering, illicit foreign currency transactions, and possible terrorism financing.
This important move comes after a Federal High Court in Abuja on April 24, 2024, granted an interim order. The EFCC will have the chance to thoroughly investigate these grave accusations thanks to the court’s decision to freeze these accounts for ninety days.
The fintech companies affected include well-known names such as Fairmoney Microfinance Bank, VFD, Kuda Microfinance Bank Ltd, and Opay Digital Services, among others. The breakdown of frozen accounts is as follows: Fairmoney Microfinance Bank (6), VFD (2), Kuda Microfinance Bank Ltd (27), Opay Digital Services (43), Carbon MTB (7), MoMo Payment Service Bank (1), Pagatech (8), PalmPay Ltd (5), and Moniepoint (6).
These steps are a part of an expanded investigation by the EFCC into 1,146 bank accounts that may have been involved in forex racketeering. Investigators have a strong suspicion that the persons involved have been manipulating the value of the Nigerian naira relative to the US dollar through the use of cryptocurrency platforms.
During a press briefing, EFCC Chairman Ola Olukoyede recently emphasized the scope of the problem. According to what he said, over 300 accounts had previously been suspended because of their connections to illegal activity on a peer-to-peer FX trading platform, where over $15 billion in transactions had taken place without following financial standards in the previous year.
A number of fintech businesses, including OPay, Moniepoint, PalmPay, and Kuda Bank, have stopped accepting new accounts as a precaution in response to recent developments. This stopgap will allow the Central Bank of Nigeria (CBN) to examine its Know Your Customer (KYC) procedures, which are essential for stopping money laundering and guaranteeing adherence to financial laws.
Details from a recent meeting with the Office of the National Security Adviser were revealed by a source who is aware of the continuing negotiations. The insider claimed that everyone agreed to back the government’s initiatives to stop financial misbehavior. The insider stated, “We were among the first to stop onboarding new consumers.” But they also noted that a sizeable percentage of the implicated accounts are held within commercial banks, with fintech accounts making up only about 10 percent of the total.
