The Central Bank of Nigeria has frozen the bank accounts of Nigerian investment fintech companies Risevest, Bamboo, Trove, and Chaka. The order to temporarily freeze the bank accounts of online investment and trading platforms Bamboo, Risevest, Chaka, and Trove, was granted by the Federal High Court in Abuja and is to last for 180 days (6 months).
The motion paper, which was filed by Chief Michael Kaase Aondoakaa, SAN, on behalf of the Central Bank Of Nigeria Governor, aims to scrutinize 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 a 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.”
According to the prosecutor, the foreign exchange deals carried out with the companies were devaluing the Naira compared to the United States dollars, necessitating the freezing of the accounts belonging to the four companies.
Notably, the four firms have gotten licenses from Nigeria’s Securities and Exchange Commission (SEC) to operate as digital platforms for buying and selling stocks, with Chaka becoming the first investment-tech company to secure Nigeria’s Securities and Exchange Commission’s (SEC) digital stock trading license in June 2021.
Two of the companies who were affected; Risevest and Bamboo, have reached out to their users and customers via Twitter to alleviate their worries. Ristvest’s CEO – Eke Eleanya assured users of its platform that trading activities will continue as usual and that the issue will be sorted out with the regulators.
Interestingly, this action is preceded by a recent move by the Central Bank of Nigeria to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country, and a clampdown on these platforms for not being duly registered in April.
While granting the order, the presiding Judge, Justice Ahmed Mohammed left open the door for any person who felt aggrieved about the freezing order to approach the court within the period to seek redress. The case has been adjourned to February 20, 2022, for hearing.
So far, none of the four companies have refuted the claim by the Central Bank of Nigeria. The allegation might, however, cause damage to the companies, denting the companies’ reputation, and dissolving the trust that users have placed with the companies. This could lead to loss of customers for the companies, and if caution is not applied, make the companies go south.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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The Central Bank of Nigeria has frozen the bank accounts of Nigerian investment fintech companies Risevest, Bamboo, Trove, and Chaka. The order to temporarily freeze the bank accounts of online investment and trading platforms Bamboo, Risevest, Chaka, and Trove, was granted by the Federal High Court in Abuja and is to last for 180 days (6 months).
