Nigeria’s CBN Slams $2m Fines on Four Banks for Crypto Transactions

The Central Bank of Nigeria (CBN) has imposed monetary sanctions of N814.3 million (nearly $2 million) on four commercial banks in the country for permitting cryptocurrency transactions, Bloomberg reports.

The sanctions come over a year after the apex monetary authority placed an implicit ban on cryptocurrencies in Africa’s largest democracy by ordering all commercial banks in the country to shut down all cryptocurrency-related accounts.

CBN is said to have spotted the transactions through its ultramodern surveillance technology currently exclusive to it.

The fined lenders are Stanbic IBTC Bank, the banking division of the Stanbic IBTC Holdings; Access Bank PLC, which is owned by the Access Bank Group; the United Bank for Africa (UBA) PLC, a Nigerian pan-African financial services group; and Fidelity Bank PLC.

While Access Bank got the biggest monetary sanction of N500 million ($1.2 million), Fidelity Bank got the smallest at N14.3 million ($34, 363).

However, UBA got slammed with N100 million ($240, 298) while Stanbic IBTC Bank incurred N200 million ($480,596). The fines in total stand at $1,956,746 million at the country’s official exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate of N416.15 naira to a dollar as of Wednesday.

The Chief Executive Officer of Stanbic IBTC Bank, Wole Adeniyi, had disclosed the fining of the local banking division during an investor conference call held on Tuesday in Lagos, Nigeria’s commercial capital, the outlet reported.

More on the Fines

According to Adeniyi, the monetary sanction imposed on Stanbic IBTC Bank was for two accounts alleged to have been used for cryptocurrency transactions.

Nigerian local media, Premium Times, reported that Adeniyi explained that although the domestic bank has been following the apex bank’s directives on cryptocurrency, the two deals were processed through its system without the lender noticing.

In contrast, Access Bank, Nigeria’s largest commercial bank by asset, was penalized for its failure to close customers’ crypto accounts.

Additionally, while UBA was sanctioned for approving the digital currency transactions of one of its customers, Fidelity Bank incurred the regulator's wrath for a similar offence.

Nigeria: Africa’s Crypto Reflection?

Nigeria is one of the top countries in terms of crypto demand in Africa and globally. There are concerns as to what Nigeria's strict regulations on digital assets could portend for the continent.

According to the Brookings Institution, Africa is the fastest-growing cryptocurrency market among developing economies and the third-largest growing market in the world.

Chainalysis’ 2021 Global Crypto Adoption Index ranks Nigeria, Kenya and South Africa among the top 10 countries in the world in terms of cryptocurrency use.

However, not all countries in the continent are open to cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. According to a report by the United States’ Library of Congress (LoC), of the 51 countries that have implemented a ban on cryptocurrencies, 23 are African countries.

While four African countries, Algeria, Egypt, Morocco and Tunisia, placed an absolute ban on cryptocurrency, 19 countries have placed implicit restrictions on digital currencies.