CBN fines FCMB, Fidelity Bank, and Wema Bank N514 million ($857,000) over cryptocurrency transactions.

The Central Bank of Nigeria (CBN) has fined First City Monument Bank (FCMB), Fidelity Bank Plc, and Wema Bank N514 million because they contravened the CBN circular of 5 February 2021 by facilitating cryptocurrency transactions. So far, this brings total fines against banks in Nigeria over cryptocurrency transactions to a whopping N1.315 billion (up to $2.1 million). The CBN circular of 5 February 2021 restricted deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs) from facilitating cryptocurrency transactions. The account of any customer involved in cryptocurrency must be closed immediately. 

Of the N514 million (up to $857,000) fine, FCMB was fined N400 million. This is because FCMB failed to close four accounts used for cryptocurrency transactions. The customer accounts involved are Cryset Limited, Royal Jingling Enterprise, Thanas Fasio Experts, and Quadrant Emergencia Golden Global.

Wema Bank was fined N100 million (up to $166,600) and Fidelity Bank Plc was fined N14.28 million (up to $23,800). 

Combined with the fines against Access Bank, Stanbic-IBTC, and UBA which we reported earlier, CBN sanctions against banks for contravening the CBN circular on cryptocurrency now amount to a whopping N1.315 billion (up to $2.1 million). Particularly considering the heaviness of the fines, many Nigerians are wondering whether banks and other financial institutions, particularly the sanctioned banks at the time of writing this report, will not consider approaching the courts for redress. Though this is not the first time CBN is making a move against cryptocurrency, it is the first time it is imposing fines on banks for facilitating cryptocurrency transactions. So it remains to be seen whether the affected banks will seek redress, if they haven’t already complied.

Noticeably, these CBN fines do not seem to be necessarily fresh. This is because the fines were reported in the banks’ 2021 audited financial statements and filing to the Nigeria Exchange Ltd. 

Meanwhile, appeals to the CBN have been unsuccessful. (One wonders if CBN decisions on such appeals shouldn’t be subject to review by a court of competent jurisdiction.)

CBN launched its own digital currency, eNaira, in October 2021. But currently, the eNaira appears to be presently struggling to gain the expected level of adoption when compared to the increasing cryptocurrency adoption in the country. 

Should the CBN prepare to meet the affected banks in court or will it be business as usual?