One of the most renowned banks in Nigeria, Union Bank Plc has given out threats to shut down bank accounts that are being used to perform crypto currency transactions. This threat is in accordance with the Central Bank of Nigeria’s (CBN) previous warnings about trading with crypto currency.
Union Bank issued a statement to account holders which stated that in order for the Bank to guarantee the safety of their customer’s funds, they will monitor bank accounts that are being used for crypto currency transactions, and this may cause certain restrictions as well as resulting to closing accounts involved.
The Union Bank which is about a 100 year old and has assets worth over $3.84 billion supported this recent decision with the warning statements from the Apex bank which does not out rightly restrict the crypto currency trading process.
Recall that in January 2017, CBN in a letter addressed to financial institutions instructed them not to use, hold or trade crypto currencies pending “substantive regulation and or (a) decision by the CBN.” In February 2018, another statement was released which carried the same warnings and also made it known that crypto currencies is not a recognized payment medium in Nigeria and they warned about the risks associated with Cryptocurrency involvement.
This decision by the Union Bank has sent shivers all around the West African country’s digital asset industry which is the biggest in Africa. Many crypto investors have even started withdrawing funds from their bank accounts with fear of their accounts being frozen.
The reason behind this said action concerning crypto currency transactions by the Union Bank’s is still yet unknown. It being in relation with CBN’s warnings make it more complex as neither of the two parties is condemning crypto currency transactions to be illegal. Union Bank however made it known that this action to monitor accounts does not imply that they are suspecting that some of their customers may be violating the anti-money laundering laws. Instead, this action is just to improve vigilance and further safeguard customer’s funds.
Co-founder of Cryset LLC (an over-the-counter bitcoin trading platform in Lagos), Munachi Ogueke, said that most people within involved with crypto currency trading in Nigeria had already been notified of the possibility of their Union Bank account being closed. According to him, many of them are withdrawing their money out of their accounts and closing it down. Munachi Ogueke indicated that perhaps the commercial banks may have received full power from the Central Bank to close down clients’ accounts without a known reason, so far as their actions are backed by the anti-money laundering rules.
For now, no other bank has shown any sign or possibility of taking this same action as the Union Bank but most banks are always careful when customers are involved with crypto currency transactions. It is clear that Nigeria is still lacking legal regulations regarding crypto currency despite it having the largest crypto industry in the continent.