Recent reports indicate that Nigerian authorities are ramping up their efforts to crack down on crypto trading in the country. This crackdown specifically targets peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A circulating circular on social media platform X has outlined the directives issued by the Central Bank of Nigeria (CBN) regarding these exchanges. However, the CBN has denied the authenticity of the circular, labeling it as “fake content.” Despite this denial, individuals familiar with the situation have noted that reversing unpopular policies is not uncommon in the region.
According to the trending circular, the CBN has instructed financial institutions in Nigeria to identify individuals or entities engaging in transactions with the aforementioned exchanges. These institutions are required to implement a six-month Post No Debit (PND) instruction on the accounts of these individuals or entities. The CBN has emphasized that the platforms in question are not licensed to operate in Nigeria and are currently under investigation. Defaulters of these directives are warned of severe regulatory sanctions. Additionally, the CBN has issued a stern warning against individuals involved in the “illegal buying and selling of USDT,” stating that they will face arrest.
The impact of these crackdowns extends beyond just the targeted P2P platforms. Olumide Adesina, a respected business journalist, has shed light on the CBN’s stance, which dictates that only entities regulated by the Nigerian Securities and Exchange Commission (SEC) can interact with banks in the crypto market. Furthermore, Ola Olukayode, the chairman of the Economic and Financial Crimes Commission (EFFC), has highlighted how transactions on platforms like KuCoin have exacerbated the country’s foreign exchange challenges. The EFFC has taken action by freezing approximately 300 suspected illegal forex accounts associated with P2P trading.
The Nigerian government’s stringent approach towards crypto trading is fueled by its desire to stabilize the foreign exchange market. Initially, authorities attributed the weakening value of the Nigerian Naira against the US Dollar to speculative activities on the Binance crypto exchange. Despite denials from Binance, the exchange and two of its executives are currently facing trial for alleged tax evasion and money laundering. Binance has expressed cooperation with the authorities and has called for the release of its detained employees.
The evolving landscape of crypto regulation in Nigeria underscores the complexities and challenges faced by both authorities and market participants. As the government seeks to assert greater control over the crypto market, the ripple effects of these crackdowns are likely to be felt across the entire financial landscape of the country.
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