Why the CBN Froze Bank Accounts of Risevest, Bamboo, Trove, Chaka and Others

The news making rounds in the Nigerian fintech space on August 18, 2021, is that the Central Bank of Nigeria froze the bank accounts of Risevest, Bamboo, Trove, Chaka, CTL/Business Expenses and other similar platforms and would keep them frozen for 180 days (6 months).


This came about after the Federal High court in Abuja granted an ex parte motion (requested by CBN), ordering the temporary freezing of bank accounts belonging to these online investments and trading platforms. 


Online investments in local and international stocks, bonds, and securities have long gained popularity in Nigerian fintech, especially among young people. These platforms offer Nigerians easy access to foreign investments.


According to the CBN, Bamboo Systems Technology Limited, Rise Vest Technologies Limited, Chaka Technologies Limited, Trove Technologies Limited and CTL/Business Expenses were operating without licenses as asset management companies. Excerpts of the court motion circulating online partly read:


“Rise Vest Technologies Limited . . . 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 . . . 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.”

Image source: Techcabal

Furthermore, CBN alleged that these companies were utilizing FX sourced from the Nigerian foreign exchange market for purchasing foreign bonds/shares in contravention to the CBN circular referenced TED/FEM/FPC/GEN/01/012, dated July 01, 2015. 


The apex bank claimed the foreign exchange deals carried out on these platforms were playing a part in making the Naira weaker to the U.S Dollars which violated Nigeria’s trading laws. Hence the need to freeze their accounts while the CBN conducts a thorough investigation. The regulator has also advised capital market operators (CMOs) working directly with the fintech platforms to cease until further notice.


Before this sanction, the CBN has moved to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country and in April, the Security and Exchange Commission called public attention to unregistered online investment and trading platforms stating that “only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.” Recall how this relates to the CBN 2020 regulations regarding US Dollar remittance into Nigeria.


Despite the media efforts made by Risevest, Bamboo, and Trove to assure users of the safety of their investments and trading positions, analysts believe that this recent move might have shaken investors’ faith in online investment and trading platforms in Nigeria.

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