CBN Freezes Bank Accounts of Bamboo, Risevest, Two Other Fintechs for FX Infractions

The Central Bank of Nigeria has ordered the freezing of bank accounts belonging to some Nigerian online investment and trading platforms for the next six months. They are Risevest, Bamboo, Trove and Chaka.

The fintech platforms have been accused of operating without license while the foreign exchange deals done weaken the the Naira against the US dollar.

According to sources, the Federal High Court in Abuja has granted an exparte motion which sought temporary freezing of their bank accounts.

The CBN alleged that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited were complicit in operating without license as asset management companies “and utilizing FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of the CBN circular referenced TED/FEM/FPC/GEN/01/012, dated July 01, 2015.

The prosecutor told Justice Ahmed Mohammed that the foreign exchange deals done with the defendants were making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for about 180 days.

In response to this announcement, Risevest’s CEO Eke Eleanya Urum and Bamboo have come out on Twitter (that’s banned) to assure users of Risevest that trading activities will continue as usual and the issue will be sorted out with the regulators.

This action by the apex bank comes on the back of the recent move by the CBN to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country, and a restriction on these platforms for not being duly registered in April.

According to a source from one of the affected companies, they lost a lot of users and deposits after the April announcement. It took a lot of explaining and convincing to get users to trust that their money was safe and the activities of the fintech platform is legal.

This recent announcement would cause massive reputational damage.

%d bloggers like this: