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Nigerian Crackdown on P2P Crypto Trading
Nigerian authorities are preparing for a new phase of their crackdown on cryptocurrency trading, specifically targeting peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit, as indicated in a circulating document on X, a notable social media platform.
Despite this, the Central Bank of Nigeria (CBN) has refuted the claims made in the circulating document, dismissing it as “false information” that did not originate from the bank. Previous instances of policy reversals in the region have been mentioned by those familiar with the situation.
The Circular
Per the circulating document, the CBN has instructed financial institutions within the country to identify individuals or entities engaged in transactions with the aforementioned exchanges and to enforce a six-month Post No Debit (PND) directive on their accounts.
The CBN maintains that these platforms do not possess the required licenses to operate in Nigeria and are presently under investigation. Failure to comply with this directive will result in severe regulatory penalties. Furthermore, the bank cautioned that individuals involved in the “illegal purchase and sale of USDT” would face arrest.
Regulated financial entities in Nigeria have been reminded by the CBN that they are prohibited from engaging in cryptocurrency transactions or facilitating payments for crypto exchanges. Olumide Adesina, a business journalist, clarified that the CBN’s official position is that only entities regulated by the Nigerian Securities and Exchange Commission (SEC) can conduct business with banks in the crypto market.
Freezing of Over 300 P2P Accounts
During a recent press briefing, Ola Olukayode, the chairperson of the Economic and Financial Crimes Commission (EFFC), emphasized that transactions on P2P platforms like KuCoin were contributing to Nigeria’s foreign exchange difficulties. The anti-graft agency disclosed that approximately 300 suspected illicit forex accounts engaged in trading on P2P platforms had been frozen. Notably, one of these platforms facilitated over $15 billion in transactions over the past year.
This latest development aligns with the Nigerian government’s stringent approach to cryptocurrencies aimed at stabilizing the foreign exchange market. Initially, the depreciation of the Nigerian Naira against the US Dollar was attributed to speculative trading activities on the crypto exchange Binance by currency traders, although Binance has denied these allegations. Nonetheless, the exchange and two of its executives are currently on trial for charges of tax evasion and money laundering.
Binance has expressed its cooperation with the authorities and advocated for the release of its detained employees.
April 24 Update: Information from the Central Bank of Nigeria has been added.
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