Kuda Bank has informed its customers that it will cancel accounts proven to be involved in cryptocurrency transactions.
The bank indicated that it cannot support cryptocurrency transactions because they contravene the Central Bank of Nigeria’s policy, which governs all financial institutions in the country.
Kuda Bank’s announcement comes in the wake of several social media complaints concerning account cancellations.
Kuda Bank’s stance on cryptocurrencies
According to a source, Kuda Bank was the first Nigerian bank to collaborate with Binance, a famous cryptocurrency exchange, and it was a huge supporter of cryptocurrencies at the time. However, everything changed after the supreme bank prohibited cryptocurrency transactions.
Following the CBN’s announcement, Kuda Bank sent a communication to customers on February 12, 2021, informing them of its new cryptocurrency position.
“In light of the recent letters and remarks published by the Central Bank of Nigeria about transactions connected to cryptocurrencies, please notice that Kuda Microfinance Bank is not allowed to deal in, or enable the trade of, any type of cryptocurrency,” the message said.
“As a result, we highly encourage you not to utilize your Kuda account for cryptocurrency-related activities to avoid getting into legal difficulties.”
Kuda responds to accusations of accounts closure.
In response to recent complaints, the bank released a message to its customers reiterating its commitment to follow the CBN’s rules and regulations when conducting business.
According to a statement acquired by Daily Episode, Kuda Bank warned consumers that if the bank did not take action against fraud, it would be considered breaking the law.
Part of the message reads:
“Let’s be crystal clear: We are on your side. We are your bank. There should never be any doubt about this.
But as much as we are on your side, we are also a licensed financial institution and our banking license comes with regulations and rules that we must obey.
If we disobey these regulations and rules, we will not be allowed to continue running a bank for you or anyone else. There will be no bank of the free if we break the law.
So when a Kuda customer uses their account in a way that breaks the law, we must do what the law demands.
In some cases, this could be as simple as asking the customer to explain what they use their account for. This is part of a standard KYC (Know Your Customer) process for any financial institution.
In cases of clear fraud, the law demands that we report the customer to the appropriate authorities and close their account with us so that they won’t continue to defraud other people of their money with that account.
Remember that it could be you being defrauded, and we must do everything in our power to prevent this from happening.
If we do not do what the law demands in these cases, we will also be considered to be breaking the law.
This is why, for example, we have advised everyone not to use their Kuda account for cryptocurrency transactions of any kind, otherwise we’ll be forced to close their account as demanded by regulations. As of today, licensed financial institutions like ours are prohibited from enabling cryptocurrency transactions and we are not allowed to ignore this prohibition. It is simply what the law demands.”
Another point of view
Kuda Bank does not close accounts for no reason, “Daily Episode gathered from Nairametrics,” adding that “the CBN policy must have been broken by the closed accounts.”
He also indicated that if an account has been closed inadvertently, it can be reactivated.
“The bank is losing money by not promoting cryptocurrencies,” he conceded, “but we must observe the CBN standards.”
