Kuda Threatens To Close Accounts Involved In Cryptocurrency Transactions

Kuda – a microfinance bank has warned its customers that it will close accounts found to be engaged in the transaction of cryptocurrency.

This was revealed in a press statement, indicating that the bank’s position to close all accounts associated with the transaction of cryptocurrency was as a result of the policy by the Central Bank of Nigeria.

The press statement further stated that the trading of cryptocurrency was a violation of the policy listed by the CBN. Kuda Bank’s statement follows multiple complaints on social media about several account cancellations.

Having been the first Nigerian bank to gain collaboration with Binance – a notable cryptocurrency trading agency on the 3rd of October, 2020, Kuda’s recent statement and stance is seen as a shock especially to its customers.

Per Nairametrics, a statement from the Kuda Microfinance Bank reveals that if it did not act against fraudulent acts, the bank would be considered as one breaking the law.

The statement which partly 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.”

Per Nairametrics, an insider source revealed that the bank does not close close accounts of its customers for “no cause”, as there are reasons for its actions.

“Kuda bank does not close accounts for no cause,” a source inside Kuda Bank said. “The CBN policy must have been broken by the accounts that were cancelled.”

He also stated that if an account has been incorrectly closed, there is a way to reactivate it.He admitted that cryptocurrency is profitable, stating that the bank is losing money by not supporting cryptocurrencies, but they (Kuda) are in no contradicting choice but to obey the CBN guidelines in regards to cryptocurrency trading.