Nigeria’s Central Bank freezes bank accounts of fintech platforms Risevest, Bamboo, Trove and Chaka

The Central Bank of Nigeria has just frozen the bank accounts of Nigerian fintech platforms Risevest, Bamboo, Trove and Chaka for the next six months.

According to The Whistler, the Federal High Court in Abuja has granted an exparte motion which sought temporary freezing of bank accounts belonging to these online investment and trading platforms where Nigerians are transacting business online.

The motion was filed by Chief Micheal Kaase Aondoakaa, SAN, on behalf of the Central Bank Of Nigeria Governor for the purpose of probing the financial activities of these four fintech companies in Nigeria.

The CBN alleged that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited 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.”

The prosecutor told Justice Ahmed Mohammed that the foreign exchange deals done with the defendants were making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for about 180 days.

Notably, all four companies affected by this action have gotten licenses from Nigeria’s Securities and Exchange Commission (SEC) to operate as digital platforms for buying and selling stocks.

In response to this announcement, Risevest’s CEO Eke Eleanya Urum and Bamboo have come out on Twitter (that’s banned) to assure users of Risevest that trading activities will continue as usual and the issue will be sorted out with the regulators.

Hey guys, in respect to the most recent news regarding @Risevest and our FX dealings, rest assured all user investments and funds are safely managed, funding and withdrawals will continue to be processed as normal and all our US operations are intact.

— -valar morghulis- (@eldivyn) August 17, 2021

Hi everyone, we’re aware of the recent reports about us. Our legal and government relations teams are looking into it but we thought it was important to let you know that your money remains safe with Bamboo and will always be readily accessible.

— Bamboo (@investbamboo) August 17, 2021

So far none of the affected companies has come out to refute this claim. This action comes on the back of the recent move by the CBN to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country, and a restriction on these platforms for not being duly registered in April.

Here’s why Nigeria’s central bank is banning forex sales to money changers

According to a source from one of the affected companies, they lost a lot of users and deposits after the April announcement. It took a lot of explaining and convincing to get users to trust that their money was safe and the activities of the fintech platform is legal. This recent announcement would cause massive reputational damage.

TechCabal has reached out to the affected fintech companies and is awaiting their comments.