On Tuesday, the federal high court sitting in Abuja granted
the request of the Central Bank of Nigeria (CBN) to freeze accounts belonging
to some technology trading platforms offering local and foreign stocks.
In his ruling, Ahmed Mohammed, the judge, granted the
prayers of the apex bank to freeze the accounts of RiseVest Technologies
Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited, and
Trove Technologies Limited for 180 days.
This is not the first time the apex bank is clamping down on
major fintech platforms offering foreign stocks to its customers.
In February 2021, the CBN directed banks and other financial institutions to close any accounts dealing in cryptocurrency or facilitating payment for cryptocurrency exchange, with immediate effect.
While delivering the ruling, Mohammed added that any person
who feels aggrieved about the freezing order is entitled to approach the court
within the period to seek redress.
He then adjourned further hearing till February 20, 2022.
TheCable looks at the various ‘sins’ of the fintech trading
platforms, according to CBN.
RISEVEST TECHNOLOGIES
LIMITED – NO LICENCE/ALLEGED CRYPTO TRADING
The CBN accused Risevest of engaging in cryptocurrency
trading which contravened it’s circular referenced BSD/DIRUPUB/LAB/014/001,
dated February 5, 2021.
“Our review revealed that the company consummated its asset
management activities through its account 1017558580 with Zenith Bank PIc,
which recorded a turnover of N1.8billion between January 1, 2019, and April 27,
2021,” CBN said in a court filing.
“Inflows to the account ware mainly from retail investors
through two Payment Service Solution Providers (PSSPs): Flutterwave (N588.81
million) and Monnify (N987.58 million). Outflows from the account were to a
PSSP-Paystack (N500.00 million) and cryptocurrency traders like BuyCoins
(N110.00 million) and Beltium Ventures (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/DIRUPUB/LAB/014/001, dated February 5, 2021.”
BAMBOO SYSTEMS
TECHNOLOGY LIMITED – NO LICENCE
The apex bank said Bamboo operates an online app for trading
in stocks, exchange-traded fund and derivatives listed in major US exchanges.
“Bamboo Systems Technology Limited is owned by Us-based
Bamboo Global LLC (99.99%) and Oluwole Ralph 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 Grag 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.”
CHAKA TECHNOLOGIES
LIMITED / NO LICENCE AND ALLEGED ILLEGAL FOREX TRANSACTION
CBN accused Chaka of engaging in the purchase of forex from
illegal operators for trading in naira and dollar securities.
It stated further that the fintech startup has an aggregate
turnover of N9.26 billion in more than two years.
In June, the Securities and Exchange Commission (SEC)
granted Chaka Technologies, a licence to offer stocks directly to investors in
the country.
TROVE TECHNOLOGIES
LIMITED – NO LICENCE/ ILLEGAL FX TRANSACTIONS
CBN accused Trove of engaging in cryptocurrency trading as
well as operating mobile and digital investment app for local and foreign
securities without approval.
“A review of the company’s domiciliary account 5071080410
with Zenith Bank Pic showed a turnover of $1.42 million between May 1, 2019,
and April 27, 2021.
“Inflows to the account were from investment partners like
USA-based Drivewealth LLC ($0.69 million) and ARM Securities Limited ($0.18
million). Other inflows were from illegal FX operators like Vertos Financial Technologies
Limited ($0 10 million), West Continental Prospecting
Limited $0.03 million) and West Atlantic Drilling ($0.02
million). The company also received inflows from individuals like Abosede
Abibat Oyewole ($0.12 million), Ahutu Amina $0.05 million) Ayobamidele Oni
($0.04 million), Babatunde Olakunla Edun ($0.03 million) and Arinze Alexander
Anyaeche ($0.02 million). Outflows from the account included offshore transfers
to Drivewealth LLC (51.10 million) for investments on behalf of its clients. Other
outflows were to Docklands Enterprises $0.06 million which the transfer
instruction described as payment for FX transfer and Simon Olaleye ($0:06
million).”
On the naira account, the apex bank said Trove engaged in
‘illegal forex transactions’ with BDC operators.
“A review of the company’s Naira accounts (1016068138
&1010785581) with Zenith Bank Plc showed an aggregate turnover of N3.27
billion. Inflows to the account were from PSSPs like Teamapt Lid (N2.49
billion), Paystack (N0.22 billion) and Flutterwave (N0. 11 billion)
“Outflows were in companies involved in B2B payment
solutions as well as cryptocurrencies like Verto Financial Technologies Ltd
(N1.09 billion) and Paystack (N0.36 billion), Quidax Technologies Ltd (N0.04
billion) and BT Pesa (N0.002 billion). Other outflow included transfers to
sundry individuals and payments for bulk purchase of FX from HFT BDC (N0.02
billion, Kiakiafx Services International Limited (N0.006 billion) and BLK
Prestige (N0.002 million).
“The foregoing is indicative that Trove Technologies Limited
was actively engaged in trading in foreign securities and cryptocurrencies
using FX sourced from illegal FX operators and Nigerian FX market in
contravention of the CBN circular of 2015.”
The tech platforms immediately informed the public that
investors and traders’ funds are in safe hands and accessible.
Bamboo, Trove, Chaka and Risevest have also assured
investors that they will work with regulators to resolve all contending issues.
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