KurePay, Africa’s foremost social payment app for cryptocurrency & fiat, has announced suspension of its business operations in Nigeria. Suspension of operations takes effect Q1 2022. Following this suspension, KurePay will be restricting its business to over-the-counter (OTC) and crypto consulting services for Nigerians and Africans generally, while exploring expansion to other African countries.
While KurePay’s decision to leave Nigeria is largely due to the increasing hostile regulatory environment in Nigeria’s emerging crypto industry following the Central Bank of Nigeria (CBN) directive which prohibited cryptocurrency transactions in Nigeria’s banking and financial system, the immediate cause is CBN’s current clampdown on peer-to-peer (P2P) crypto trading in the country.
According to Abikure Tega, the CEO of KurePay, it has been a horrible year for cryptocurrency adoption and expansion in Nigeria.
“This year has been quite horrible for cryptocurrency adoption and expansion in Nigeria as CBN continues to take drastic measures to slow down and frustrate Nigeria’s growing ability to participate in what has been the fastest-growing emerging industry in the world. When the CBN denied crypto companies including KurePay, access to banking and financial services infrastructure in February 2021, this led to closure of many business operations in Nigeria while others have reduced their operations to skeletal flow using a P2P system.”
Before the 5 February 2021 CBN directive to all Deposit money banks (DMBs), nonbank financial institutions (NBFIs), and other financial institutions (OFIs) in Nigeria, individuals and entities involved in cryptocurrency were provided banking and financial services as long as they complied with AML/KYC regulations implemented by their financial institutions. But this changed from 5 February, resulting in a denial of banking and financial services to both individuals and entities involved in cryptocurrency or virtual asset transactions in the country. This situation forced most Nigerian crypto users to adopt P2P platforms.
The current CBN clampdown, which is obviously targeted at entities and individuals that provide p2p platforms or services to customers who buy and sell crypto, has seen blocking, closure, and/or freezing of bank accounts suspected to be used to transact cryptocurrency in the country become the order of the day in Nigeria’s banking and financial system. This is curiously so since the launch of the eNaira by the CBN, similar to the clampdown by the People’s Bank of China following its introduction of the Digital Yuan, China’s central bank digital currency (CBDC).
KurePay uses blockchain technology to provide payment solutions for e-commerce by enabling crypto-to-fiat or fiat-to-crypto transactions for the purpose of paying private and public bills, including electric bills, satellite TV, and recharge cards from the comfort of your phone. It also enables users to buy and store crypto assets, all in a self-regulated platform.
Until the recent CBN clampdown on P2P platforms, which the KurePay CEO has described as ‘low’ from CBN, KurePay had pivoted to using experience centre and agency network to enable customers transact with each other without relying on KurePay’s now cut-off direct integration with banks. About 9 months of trying to make the agency network model work for customers, banks have started closing and freezing bank accounts in great numbers due to CBN’s fresh directive.
“The recent show of lowliness from CBN in its recent closure of bank accounts in Nigeria with connection to crypto transactions affecting most of Kurepay agent partners in the name of regulation is unfair and frustrating. Due to this recent clampdown which we find difficult to understand considering that Nigeria is not a lawless country, KurePay, Africa’s foremost social payment app for cryptocurrency & fiat—is announcing the suspension of business operations in Nigeria. Henceforth, KurePay will restrict its business to over-the-counter (OTC) and crypto consulting services for Nigerians and Africans at large”.
Current KurePay platform users are advised to carry on with their transactions as usual until they are migrated to a newly created US-based platform which would be communicated to them in due time. But new Nigerian users are not encouraged to use the platform for now.
Similar to a number of frustrated businesses who have moved to friendlier or less hostile jurisdictions outside Nigeria, the KurePay CEO hinted at plans to launch a US-based company with a focus on the Africa market:
“We plan to operate a US-based company in order to innovate in a more business-friendly environment. This may not provide all the answers innovators badly need from regulators but at least there will be respect for the rule of law and access to banking and financial services will not be denied to an entire industry by mere circulars without bringing all stakeholders, including lawmakers to a roundtable. CBN’s action is a disservice to Nigeria, a nation that is supposed to belong to us all”.