Millions Trapped As Court Freezes Bank Accounts Of Forex Trading Platforms

Posted on August 17, 2021

The Federal High Court sitting in Abuja has granted an exparte motion which sought temporary freezing of bank accounts belonging to certain online investment and trading platforms where Nigerians are transacting business online.

The motion was filed by Chief Micheal Kaase Aondoakaa, SAN, on behalf of the Central Bank Of Nigeria Governor for the purpose of probing the defendants’ financial activities in Nigeria.

Defendants are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Tech. Ltd OPNS, Chaka Technologies Limited, CTL/Business Expenses and Trove Technologies Limited.

The CBN alleged that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited were complicit in operating without 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.”

Aondoakaa told Justice Ahmed Mohammed that the foreign exchange deals done with the defendants was part of what was making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for about 180 days.

Part of the motion reads: “An Interim Order of this Honorable Court empowering the Plaintiff/ Applicant to direct the Head Offices of ZENITH BANK PLC (Churchgate Street, Victoria Island, Lagos), GUARANTY TRUST BANK PLC (Plot 635, Akin Adesola, Victoria Island, STANDARD CHARTERED BANK (142, Ahmadu Bello Way, Victoria Island, Lagos.), ACCESS BANK OF NIGERIA (999c, Danmole Street, Off ldejo Street, Off Adetola Odeku Street, Victoria Island, Lagos), VFD MICROFINANCE BANK (Elephant House. 5, Floor, 214 Broad Street, Marina Island, Lagos), to freeze forthwith all the bank accounts of the Defendants/ Respondents for a period of 180 days pending the outcome of investigation and inquiry conducted by the CBN.”

According to an affidavit filed by a Senior Supervisor of the CBN, Christiana Gyang, the apex bank had reviewed the activities of the defendants to determine their alleged involvement in illegal foreign exchange (FX) dealings.

She stated that investigation showed that the platforms were violating Nigeria’s trading laws.

It says, “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 milllon).

“Outflows from the account were to a PSSP – Paystack (N500.00 milllon) and cryptocurrency traders Ike BuyCoins (N110.00 millon) 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.”

Furthermore, Aondoakaa told the judge on Tuesday that the CBN was worried about how monies were going out of the country.

“We need to write the Embassy, we need to go to the Foreign Affairs….the Minister will serve the US to seek assistance so that we can block this linkages,” the lawyer added.

In his ruling, Justice Ahmed said “having listened to senior counsel to the applicant, on the motion Exparte filed in August, it is granted as prayed”

He said that any person who feels aggrieved about the freezing order is entitled to approach the court within the period so as to seek redress.

He then adjourned the matter to February 20 for hearing.

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