What’s CBN angry about now?

The Central Bank of Nigeria has issued a temporary court order to freeze the bank accounts of these digital stock trading platforms Bamboo, Risevest, Trove, and Chaka for the next six months.

Now the question you may want to ask is what happened? Why the hard knock?

CBN alleges that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited, and Trove Technologies Limited are complicit in operating without a 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 also 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.

According to The Whistler who told Justice Ahmed Mohammed of the Federal High Court in Abuja, granted an ex parte motion which sought temporary freezing of bank accounts belonging to these online investment and trading platforms where Nigerians are transacting business online.

The motion was filed by Chief Micheal Kaase Aondoakaa, SAN, on behalf of the Central Bank Of Nigeria Governor for the purpose of probing the financial activities of these  fintech companies in Nigeria.

Needless to say, in June 2021 Techibytes reported Fintech platform, Chaka becoming the first investment-tech company to secure Nigeria’s Securities and Exchange Commission’s (SEC) digital stock trading licence. 

Although Asset Management companies are ordinarily within the purview of SEC, it appears CBN is bringing this suit under its regulatory powers regarding foreign exchange.

An affidavit credited to Christiana Gyang, Senior Supervisor at CBN alleges that Risevest traded in cryptocurrencies in contravention of CBN’s circular dated February 5, 2021.

What’s the affected companies saying?

In response to this announcement by the CBN, the affected companies are reacting. Risevest’s CEO Eke Eleanya Urum and Bamboo have both put out a statement on Twitter to assure users of Risevest that trading activities will continue as usual and the issue will be sorted out with the regulators.

Where to now?

In April 2021, CBN put a restriction on these asset management platforms for not being properly registered and of recent, it also made a move to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in Nigeria. 

As expected, these unfriendly moves have sent panic down the throat of many investors and these companies allegedly lost a lot of users and deposits after the April announcement. It took a lot of effort to get users to trust that their money was safe and the activities of the fintech platform is legal. 

Now you may want to ask, what about their customers’ investment and monies? 

Chaka, Rise Vest, and Bamboo have sent out messages to their customers, assuring them that trading activities will continue as usual and the issue will be ironed out with the regulators

This court order will most likely incapacitate the operations of these platforms financially as they would have challenges with salaries and running costs. 

The court has also added that any of these companies can approach it concerning the ruling

is this an economic sabotage or a justifiable attempt by the government?

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