Union Bank of Nigeria (UBN) May Shut Down Cryptocurrency Customer Accounts

One of the largest commercial banks in Nigeria has just threatened to close an” undisclosed number of cryptocurrency-related accounts” linked with itself without providing any solid explanation for the same. A representative for the Union Bank of Nigeria, which is based out of Lagos, said that this latest directive comes after the company’s executive brass instructed employees to remain “strictly in line” with the guidelines put forth by the Central Bank of Nigeria (an entity that in the past has issued a host of warnings to the masses against cryptocurrency trading).

News of Account Closures Sends Panic Waves Among Customers

Earlier this week, the Union Bank of Nigeria posted a statement on its official website regarding the aforementioned decision. The document read:

“In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.”

At this point, it is also worth mentioning that the the UBN is a 100-year-old institution that currently has under its possession assets worth $3.84 billion.

More On The Matter

Earlier in 2017, the Central Bank of Nigeria (CBN) had issued a circular to all of the nation’s banking entities saying that they should avoid the “use, holding or trade virtual currencies pending substantive regulation and or (a) decision by the CBN.”

Similarly, via a follow-up statement in February 2018, the government agency said that virtual currencies were not legal tender within Nigeria and thus all of those individuals making use of such assets, should do so knowing that they are acting in direct opposition to the law of the land.

The Aftermath

The decision taken by the Union Bank of Nigeria to monitor customer accounts has really sent huge shockwaves within the nation’s digital asset industry. If local reports are to be believed, many crypto investors have already started taking their money out from their UBN accounts in order to avoid the possibility of having their withdrawal rights terminated or suspended in the near future.

In regards to this matter, Munachi Ogueke, co-founder of Cryset LLC, said that a whole host of individuals have been warned by the central government that their bank accounts could be possibly shut down in the near future. As a result of this, Ogueke said that “many people are emptying their accounts and closing them down as we speak”

Final Take

While the Union Banks’ latest decision is quite baffling, Okuege believes that this latest exercise has been undertaken so as to send investors a clear message that moving forward, they need to stay in complete accordance with the existing AML/KYC regulations that have been established by the Nigerian government.

In regards to the matter, Ogueke explained:

“Banks that have cryptocurrency customers have the authority and can discontinue the relationship with such customers where the banks are not satisfied with the AML/CFT controls that enable compliance with the identification, verification, and transaction monitoring requirements. In the absence of any regulation from the CBN, it can be safely concluded that the CBN by this circular, has given banks (such as Union Bank) the power to close accounts of cryptocurrency customers if the customer breaches anti-money laundering control requirements and where there are suspicious transactions.”

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