Home Economy CBN fines GTCO, Fidelity Bank N84.11million over market infractions

CBN fines GTCO, Fidelity Bank N84.11million over market infractions

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The Central Bank of Nigeria (CBN) has fined Guaranty Trust Holding Company Plc (GTCO) and Fidelity Bank Plc a sum of N84.11million over market infractions.

Extracts from half year ended June 30, 2022 showed that CBN imposed N42.86million penalty on Fidelity Bank for contravening its cryptocurrency policy.

Freedom Post reports that Fidelity Bank received a sanction of N14.28 million for cryptocurrency infractions, according to its 2021 audited financial statement.

Meanwhile, GTCO was sanctioned N41.25million for failing 2021 Risk Asset Examination and 2021 AML/CFT Risk Based Examination.

Freedom Post recalled that CBN sanctioned six banks N1.31billion fine for flouting directive on crypto accounts in 2021.

In February 2021, the apex bank directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

In the circular released to deposit money banks (DMB), non-bank financial institutions (NBFIs), and other financial institutions (OFIs), the apex bank noted that disobedience to the directive would attract severe penalties.

The development elicited reactions from Nigerians, but CBN, in a 5-page circular, explained that cryptocurrencies portend the risk of loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities in the country.

The CBN had on August 17, 2021, secured, through an ex parte motion, an order freezing the accounts of some fintech companies for 180 days over alleged forex infractions.

The affected companies were Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

In October same year, a federal high court vacated the interim order freezing the accounts of Rise Vest Technologies Ltd, a fintech company.

Ruling on the application, Taiwo O. Taiwo, the judge, held that CBN could not rely on a circular to freeze the bank account of a company.

Justice Taiwo noted that the CBN failed to provide any law showing that it is illegal to deal in cryptocurrency in Nigeria, adding that the CBN circular of February 5, 2021, is not a law.

The judge, among others, held that although the CBN has the power to investigate any infraction, the infraction must relate to BOFIA or any other enactment administered by the regulator.

Despite the ban, Nigeria is among the world’s top cryptocurrency users, representing 6.31 per cent of the entire population, according to Triple A, a blockchain company, in 2021.

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