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FCMB ignores court ruling, links bitcoin trade to organised crime, threatens staff

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The First City Monument Bank (FCMB) has joined other financial institutions (OFIs) in ignoring a Federal High Court ruling against closure of cryptocurrency-linked accounts.

FCMB labelled bitcoin and other cryptocurrency trading as criminal activities, and has threatened to take action against any staff that fails to flag crypto traders.

In a statement to workers of FCMB, the lender said the Central Bank of Nigeria (CBN) was strictly monitoring non-compliance with the directive on the closure of all cryptocurrency-linked accounts.

CBN, FCMB going against court order on cryptocurrency

In one of its sweeping actions, the CBN had froze the accounts of digital investment platforms, Chaka, Trove and Rise Vest Technologies for trading in cryptocurrency.

However, in a lawsuit instituted by Rise Vest, Justice Taiwo O. Taiwo of the Federal High Court sitting in Abuja, ruled that a mere circular can’t be relied on by the CBN to block accounts of crypto traders, as it wasn’t law.

The judge stated on October 18, that the financial regulator failed to back its grievances against cryptocurrency trading with a section of the constitution, as there’s no law forbidding companies or individuals from engaging in digital assets.

This ruling was a blow to CBN’s February 5, 2021, circular informing Nigerian banks and financial institutions to close accounts involved in bitcoin and other stablecoins activities, and cut ties with crypto exchanges.

However, despite Justice Taiwo’s judgement in favour of cryptocurrency traders, Godwin Emefiele-led CBN, Nigerian banks and OFIs, have been cracking down on sellers and buyers of bitcoin and other digital coins.

Ripples Nigeria had reported that Zenith Bank, GTBank, and Kuda were clamping down on their customers linked to cryptocurrency, and now, an alleged company email from FCMB has shown that the Yemisi Edun-led bank was also targeting 18-30 year-old Nigerians trading in bitcoin.

FCMB says Nigerian crypto traders are organized gangs, money launderers

FCMB disclosed that non-compliance to CBN’s crypto ban circular will attract high impact regulatory sanction from the industry regulator despite Justice Taiwo’s judgement hovering over the financial sector.

READ ALSO: Insider trading earns FCMB N135.40m in two months

In line with the circular from CBN, and ignoring the court judgement, FCMB warned its staff to, “identify persons or organisations transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

“Any staff member who wilfully does not disclose an account used for cryptocurrency transactions, in order to enable such account to be closed will be sanctioned in line with the provisions of the Banks’s sanctions grid.”

It said monitoring of the crypto trade falls in the jurisdiction of all staff in order to protect FCMB from, “activities of criminals, organized gangs, money launderers and terrorist financiers.”

How FCMB is targeting 18-30 year-old Nigerians in its crypto crackdown

The bank has taken its fight against cryptocurrency traders one step further by not limiting its monitoring to just the keyword ‘cryptocurrency’ or ‘bitcoin’.

FCMB plans to also flag accounts that record large or multiple inflow or outflow like cryptocurrency transactions. Among its crypto red flag identifier includes;

“Accounts receiving high daily inflows from a huge number of inflow from multiple payee from all over the country.

“Account receives significant inflow and within the same period (daily/weekly), this is followed by outflows to multiple beneficiaries

“Incoming transactions from many unrelated wallets in relatively small amounts (accumulation of funds) with subsequent transfer to another wallet.

“Transactions involving the use of multiple accounts, with no logical business explanation.”

FCMB also informed its staff to specifically target certain accounts including those operated by holders in 18-30 year-old age bracket for cryptocurrency activities it deemed as criminal.

It listed “Accounts such SB128-Flexx Youth Savings Account SB110-Premium Savings Account, SB111-Busuiness Savings Account, SB119-Business Savings Account, SB101-Classic Savings Account, OD231-FCMB Business Account, OD269 Personal Business Account and OD205-Corporate Current Account, with high volume transactions operated by individuals between the age brackets of 18-30 years as SIgnatories.”

However, in its response to the profiling, FCMB said it had “not placed an alert on account holders between ages 18 and 30”, adding, “We value our relationship with young Nigerians and will never directly or indirectly profile them as fraud suspects.
“In ensuring adherence to the Anti-money laundering (AML) and Know your customer (KYC) rules of Nigeria, we are required to maintain processes that are generic and do not target any group with respect to age range.”

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