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See the 2015 CBN press release that helped freeze bank accounts of 6 FinTechs

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The Central Bank of Nigeria was granted, on Tuesday, a motion that demanded the temporary suspension of bank accounts belonging to specific online investment and trading platforms due to the violation of Central Bank directives issued in a circular.

The apex bank alleged that the fintech companies were involved in operating without a license as asset management businesses and using forex obtained from the Nigerian FX market to buy foreign bonds/shares in violation of the CBN circular.

The circular was issued on July 01, 2015, titled: “RE- Inclusion of some imported goods and services on the list of items not valid for foreign exchange in the Nigeria foreign market.”

The circular itemized a list of 41 products not valid for foreign exchange at the Nigerian foreign exchange widow, and the 41st product was “Euro bond/ foreign currency Bond/ shares.” This gave the CBN a formidable footing to tackle these fintech companies whose business centres around providing Nigerians with access to foreign financial instruments.

“For the avoidance of doubt, any Authorized Dealer that is found to have used funds from interbank, export proceeds and bureau de change to consummate these items classified as Not Valid for Forex or undertakes money wire transfer for a BDC shall be sanctioned appropriately.” – CBN.

Therefore, the CBN sort to penalize those that violated its directives as it filed a motion with the Federal High Court sitting in Abuja. The Defendants are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Tech. Ltd OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

Excerpts from the motion circulated widely online and seen by Nairametrics partly read:

“Rise Vest Technologies Limited was Incorporated in October 2018 with objects of technological and business consultancy. The company’s shareholders at incorporation were Eke Eleanya Urum and Rise Vest Technologies Limited (USA). The company partners with companies involved in payments and settlements as well as internal and international remittances.

“However, information on the company’s website indicated that it is an asset management company, which provides a platform for customers to invest in foreign instruments using an app called “Risevest.”

“Our review revealed that the company consummated its asset management activities through its account 1017556580 with Zenith Bank Plc, which recorded a turnover of 1.97 billion between January 1, 2019, and April 27, 2021.

“Inflows to the account were mainly from retail investors through two Payment Service Solution Providers (PSP): Flutterwave (588.61 million) and Monnify (N967.58 million).

“Outflows from the account were to a PSSP – Paystack (500.00 million) and cryptocurrency traders Iike BuyCoins (N110.00 million) and Bellum Venture (N350.00 million). Inquiries on the transactions confirmed that the transfers to BuyCoins were for the purchase of cryptocurrency.

“The above is indicative that Rise Vest Technologies Limited traded in cryptocurrencies in contravention of the CBN circular referenced BSD/DIR/PUB/LAB/014/001, dated February 5, 2021.”

The motion added that “Bamboo Systems Technology Limited is owned by US-based Bamboo Global LLC (99.99%) and Oluwole Raiph Olugbenga (0.01%).

“The company was incorporated in December 2018 to carry on the business of software design, implementation, development, maintenance, and consultancy, amongst others. It is related to One Global Med. Technology, BSTL Lambeth and Greg Concepts Limited.

“Further reviews showed that Bamboo Systems Technology Limited operates an online App, “Bamboo,” that provides a medium for investors to buy and sell stocks, exchange-traded funds (ETFs), Index funds, and derivatives listed in major exchanges in the U.S.”

As a consequence of these infractions, the court ordered that all of the Defendants’/ Respondents’ bank accounts be frozen immediately for 180 days, pending the CBN’s investigation and inquiry conclusion.

In case you missed it

Nairametrics reported on Tuesday that a Federal High Court in Abuja granted the request of the CBN to freeze the accounts of six fintech companies namely Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

The apex bank said it was investigating “illegal foreign exchange trading” by the fintech companies and sought the court injunction to freeze their accounts for 180 days pending the completion of investigations.

The CBN alleged that the companies were complicit in operating without 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.”

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