FinCrime Central - Latest AML/CFT News & Vendor Directory

Liberia Slaps Lonestar Cell MTN Mobile Money with L$25M Fine

This image is AI-generated.

Liberia’s financial regulatory environment took a dramatic turn as the Financial Intelligence Agency (FIA) imposed a massive fine of L$25 million on Lonestar Cell MTN Mobile Money, Inc. (LCMMMI). The fine stems from a series of disturbing compliance failures that paint a troubling picture of how the company managed its obligations under Liberia’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws.

The FIA’s decision came after an extensive, risk-based inspection conducted between September 2 and 16, 2024. Findings from the inspection revealed glaring governance and operational weaknesses, many of which had been previously flagged but left unaddressed for nearly six years.

The consequences are not only financial. The FIA’s actions mark a significant statement about the country’s increased commitment to financial system integrity, particularly as digital payment platforms grow in reach and influence.

At the heart of the FIA’s findings is LCMMMI’s failure to establish an independent board of directors distinct from its parent company, Lonestar Cell MTN GSM Inc. This violation, which contravenes Section 6, Paragraph 5 of the Central Bank of Liberia’s Mobile Money Regulation No. CBL/RSD/003/2014, had been previously flagged during a 2018 joint examination by the Central Bank of Liberia.

“This is a longstanding violation that was already cited by the Central Bank of Liberia during its December 2018 Joint Digital Financial Services and AML/CFT Risk-based Examination Report,” noted the FIA. “It is troubling and risky that LCMMMI has not taken corrective measures to address this governance issue for nearly six years.”

An independent board is crucial for objective oversight and risk management, especially in financial institutions managing large volumes of daily transactions. Without it, risks of conflicts of interest and compliance gaps increase significantly.

LCMMMI’s ongoing failure to address this requirement suggests either an unwillingness or an incapacity to align with critical financial governance standards, raising questions about broader corporate governance practices within the organization.

Operational Failures and Regulatory Breaches

Governance issues were not the only red flags. The FIA’s inspection unearthed a range of serious operational failings that compounded the company’s exposure to money laundering and other financial crimes.

Negligent agent vetting emerged as a major vulnerability. LCMMMI was found to have failed in conducting due diligence and suitability assessments of its agents. This oversight allowed bad actors, such as Smart AI, to exploit the platform for a Ponzi scheme in 2023 that defrauded thousands of Liberians.

Such breaches indicate a systemic weakness in LCMMMI’s agent management process, one that enabled criminals to weaponize mobile money services against everyday users.

The company also violated transaction authorization regulations by allegedly granting unlimited transaction capabilities to full agents and merchants without first securing approval from the Central Bank of Liberia. This move directly breached Section 15, Paragraph 4 of the Mobile Money Regulations, showcasing a disregard for critical operational safeguards.

Moreover, the FIA reported a failure to monitor high-value transactions at the agent level. LCMMMI neglected to file mandatory Currency Transaction Reports (CTRs), an explicit breach of Section 15.3.21 of the AML/CFT Act of 2021.

Compounding these issues was LCMMMI’s inadequate risk assessment framework. The inspection found that the company failed to identify and monitor money laundering risks tied to legacy customers, services, and geographic exposure. Violations of Sections 15.3.1 and 15.3.10 of the AML/CFT Act, as well as Section 2.9 of the AML/CFT Regulations for Financial Institutions, were cited.

These lapses together paint a picture of a financial services provider out of step with fundamental AML/CFT principles, leaving both the company and its users exposed to significant financial crime risks.

Liberia’s Determined Push for Financial System Integrity

The Liberian government, through the FIA, has increasingly prioritized strengthening its financial oversight mechanisms. The L$25 million fine imposed on LCMMMI is one of the most visible actions to date reflecting this commitment.

By mandating the immediate deposit of the fine into a designated government escrow account, the FIA underscores its zero-tolerance stance on regulatory noncompliance. Furthermore, the Agency issued a stern warning: further supervisory actions will follow if LCMMMI fails to demonstrate measurable improvements in its AML/CFT compliance efforts.

For Liberia, the stakes are high. As mobile money services rapidly expand across Africa, ensuring that these platforms are not exploited by criminal networks is crucial for broader economic stability, investor confidence, and national security.

The LCMMMI case sends a strong signal to other players in the financial and fintech sectors: regulatory oversight in Liberia is tightening, and institutions lagging in compliance will face steep penalties.

Beyond the financial sector, this situation also raises awareness among consumers, agents, and businesses relying on mobile money platforms about the importance of robust risk management practices.

What Lies Ahead for Lonestar Cell MTN Mobile Money?

LCMMMI’s future hinges on its response to the FIA’s findings. The company must overhaul its compliance framework, starting with governance reforms such as establishing an independent board. It must also invest heavily in agent due diligence, transaction monitoring systems, and ongoing risk assessment procedures.

Public confidence, once shaken, is notoriously difficult to rebuild. Addressing these failures openly and demonstrating transparent corrective action could help LCMMMI regain trust among regulators and consumers alike.

However, if these measures are not urgently undertaken, the company risks not just financial penalties but potentially existential threats to its ability to operate within Liberia’s growing digital financial services market.

Conclusion: A Wake-Up Call for Africa’s Digital Finance Sector

The L$25 million fine slapped on Lonestar Cell MTN Mobile Money stands as a defining moment for Liberia’s efforts to enforce AML/CFT standards in the digital finance space. The case highlights the vulnerabilities that arise when governance and operational controls are neglected, particularly in high-growth sectors like mobile money.

As digital financial services continue to transform economies across Africa, robust compliance frameworks are no longer optional. They are essential to safeguarding the integrity of financial ecosystems, protecting consumers, and promoting sustainable economic development.

Liberia’s message is clear: adherence to AML/CFT requirements is not negotiable, and financial institutions that ignore their obligations do so at great peril.