On Tuesday, 17 August 2021, the CBN filed a motion against some fintech companies, requesting that the court freeze their accounts for 180 days. The exparte motion filed, contains allegations of illegality in the operations of the companies.
In an affidavit filed by a Senior Supervisor of the CBN, Christiana Gyang, the activities of the defendants had been investigated to determine their alleged involvement in illegal foreign exchange dealings. The result she said showed that the platforms’ activities violated the trading laws of Nigeria.
The affidavit reads, “Rise Vest Technologies Limited was Incorporated In October 2018 with objects of technological and business consultancy. The shareholders of the company at incorporation were Eke Eleanya Urum and Rise Vast Technologies Limited (USA). The company partners with companies involved in payments and settlements as well as internal and international remittances.
“However, information on the company’s website indicated that it is an asset management company, which provides a platform for customers to invest in foreign instruments using an app called “Risevest”.
“Our review revealed that the company consummated its asset management activities through its account 1017556580 with Zenith Bank Plc, which recorded a turnover of 1.97 billion between January 1, 2019, and April 27, 2021.” Inflows to the account were mainly from retail investors through two Payment Service Solution Providers (PSSPe): Flutterwave (588.61 million) and Monnify (N967.58 million).
“Outflows from the account were to a PSSP – Paystack (500.00 million) and cryptocurrency traders Ike BuyCoins (N110.00 million) and Beltlum Venture (N350.00 million). Inquiries on the transactions confirmed that the transfers to BuyCoins were for the purchase of cryptocurrency.
“The above is indicative that Rise Vest Technologies Limited traded in cryptocurrencies in contravention of the CBN circular referenced BSD/DIR/PUB/LAB/014/001, dated February 5, 2021.”
The motion added that “Bamboo Systems Technology Limited Bamboo Systems Technology Limited is owned by US-based Bamboo Global LLC (99.99%) and Oluwole Raiph Olugbenga (0.01%).
“The company was incorporated in December 2018 to carry on the business of software design, implementation, development, maintenance, and consultancy amongst others. It is related to One Global Med. Technology, BSTL Lambeth and Grag Concepts Limited.
“Further reviews showed that Bamboo Systems Technology Limited operates an online App, “Bamboo”, that provides a medium for investors to buy and sell stocks, exchange-traded funds (ETFs), Index funds, and derivatives listed in major exchanges in the U.S.”
The motion filed by the CBN, and which was granted by the Federal High Court in Abuja requested that the court should freeze the accounts of the companies for 180 days.
However, on Tuesday, Bamboo and Risevest responded to the decision. Bamboo while addressing its clients said, “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.”
Risevest on the other hand replied to its clients in a statement that read, “About the latest news about us and our FX dealings, you can be sure that your investments and funds are safely managed, that funding and withdrawals will continue to be processed as normal, and that our U.S operations remain intact.
“We will work with regulators, as we always have to ensure that all issues raised are properly addressed. However, this does not affect our users or their investments, which are managed by regulated third-parties in all jurisdictions in which we operate.”
