The Central Bank of Nigeria (CBN) directed four fintech companies to stop onboarding new customers amid Nigeria’s ongoing efforts to strengthen Know Your Customer (KYC) compliance in crypto and traditional investing. 

Nigerian fintech firms OPay, Kuda Bank, Moniepoint and PalmPay have paused the creation of new accounts amid an ongoing audit of the KYC process, according to the African publication TechCabal. The report quoted a person familiar with the situation:

“The CBN feels like a lot of crypto traders were leveraging the fintech platforms to disrupt the FX (Forex) market.”

The onboarding restriction comes right after the Nigerian law enforcement agency, the Economic and Financial Crimes Commission (EFCC), blocked 1,146 bank accounts involved in unauthorized forex dealings.

However, existing customers of the four fintech firms are able to deposit and transfer funds as usual. One of the firms announced:

“We’ve temporarily paused new signups on our platform. This means that you’ll be unable to open a new account at the moment. We apologize for any inconvenience this may cause.”

An analysis of the 1,146 blocked bank accounts shows that only 10% are operated by fintechs, with the majority being commercial bank accounts.

The ongoing government intervention is led by CBN and closely supported by the National Security Agency (NSA) and the EFCC. In October 2023, Nigerian commercial bank Fidelity Bank blocked all outgoing transfers to the same four fintechs over KYC concerns.

The platforms’ lack of KYC requirements catalyzed fraud incidents such as tax evasion and money laundering. An executive representing one of the firms said that the pause on new customer acquisition is “temporary” and that the firm will resume operations after the ongoing audit of its KYC process concludes.

Related: Nigeria’s central bank forced to deny claims of crypto account freeze

Crypto enthusiasts, investors and entrepreneurs welcomed the appointment of Emomotimi Agama as the new Director-General of the Securities and Exchange Commission (SEC).

This appointment aims to regulate the capital market, enhance investor confidence, and promote economic development. Speaking to Cointelegraph , Nathaniel Luz, CEO of Flincap — an over-the-counter crypto exchange — expressed his excitement about the appointment.

He said that the community is looking forward to the new chair working together with startups to streamline their licensing process for operating crypto platforms in Nigeria.

Similarly, Lucky Uwakwe, chair of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) and founder of SaBi Exchange, described the appointment as a “wise decision.”

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