Four Nigerian Fintech Platforms Banned Over Illegal Forex Trading
Aug. 19, 2021, 12:42 p.m.
Four Nigerian fintech platforms, Risevest, Bamboo, Trove, and Chaka have had their banks frozen for six months over allegations involving ‘illegal foreign exchange’ transactions by the fintech companies.
The motion was filed by Chief Micheal Kaase Aondoakaa, SAN, on behalf of the Central Bank Of Nigeria Governor to probe the financial activities of these four fintech companies in Nigeria.
The CBN alleged that Risevest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited, and Trove Technologies Limited were complicit in trading in cryptocurrencies, contradicting CBN’s circular without a license.
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.
The CBN’s move also comes on the heels of the recent order to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country.
The fintech trading platforms offer foreign stocks to Nigerians by operating with licensed brokers in Nigeria and the US. Risevest uses Third-party partnerships to offer foreign stocks. While Bamboo, Chaka, and Trove work with Drivewealth Capital, a US-based broker regulated by the US Securities and Exchange Commission, to offer foreign stocks.
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In response to this announcement, Risevest’s CEO Eke Eleanya Urum has come out to assure users of Risevest that trading activities will continue as usual and the issue will be sorted out with the regulators.
Bamboo, also in a message to investors, said it was aware of the situation and looking into the matter, assuring investors that funds are safe.
“We are aware of the recent reports about us. Our legal and government relations teams are looking into it, but we thought it was important to let you know that your money remains safe and will always be accessible,” Bamboo said.
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 are legal. This recent announcement would cause massive reputational damage.
So far none of the affected companies has come out to refute this claim.
tag: Cryptocurrency, Startup, Fintech,
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Verny loves to write poetry, fiction and quotes. Her love for writing landed her in journalism. She loves gadgets and travelling to explore new places.