The Nigerian authorities are ramping up efforts in their crackdown on crypto trading, specifically targeting peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A circulating directive on social media platform X has outlined the government’s plans to take action against these exchanges. The Central Bank of Nigeria (CBN) has denied originating the content of the circular, dismissing it as “fake” without their endorsement.
Financial institutions in Nigeria have been instructed by the CBN to identify and restrict individuals or entities conducting transactions with the aforementioned platforms. A six-month Post No Debit (PND) instruction is to be implemented on their accounts. The CBN argues that these platforms lack the necessary licenses to operate in the country and are currently under scrutiny. Non-compliance with the directive will result in severe regulatory penalties, with a warning that individuals engaged in unauthorized USD Tether (USDT) transactions will face arrest.
The CBN has reiterated its prohibition on regulated financial entities engaging in cryptocurrency transactions or facilitating payments for crypto exchanges. Only entities sanctioned by the Nigerian Securities and Exchange Commission (SEC) are permitted to conduct business in the crypto market with banks. The chairman of the Economic and Financial Crimes Commission (EFFC) highlighted the role of P2P platforms in exacerbating Nigeria’s foreign exchange challenges, announcing the freezing of hundreds of suspected illegal forex accounts associated with these platforms.
Government’s Crypto Stance and Exchange Trials
Nigeria’s government has adopted a strict approach to crypto trading to address foreign exchange market stability concerns. Initial accusations attributed the devaluation of the Nigerian Naira against the US Dollar to speculative activities on Binance. However, ongoing trials of Binance and its executives for tax evasion and money laundering have brought the exchange under further scrutiny. Despite denying the allegations, Binance remains cooperative with authorities and advocates for the release of detained employees.
Overall, the Nigerian government’s efforts to regulate crypto trading reveal a complex landscape of enforcement, compliance, and financial stability concerns. With ongoing investigations and legal proceedings, the future of cryptocurrency trading in Nigeria remains uncertain.