Recent reports from Nigerian authorities have revealed their intentions to crack down on crypto trading, specifically targeting peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A trending circular on social media platform X highlighted the government’s directive for financial institutions in the country to identify individuals or entities transacting with these exchanges and implement a six-month Post No Debit (PND) instruction on their accounts. The Central Bank of Nigeria (CBN) has denied any involvement in the issuance of this circular, dismissing it as ‘fake content.’
According to the circulating information, the mentioned crypto platforms are not licensed to operate in Nigeria and are currently under investigation. The CBN has threatened severe regulatory sanctions against defaulters of this directive, including the arrest of individuals engaged in ‘buying and selling USDT illegally.’ Additionally, regulated financial entities in the country have been reminded of their prohibition from dealing in cryptocurrencies or facilitating payments for crypto exchanges.
In response to the growing concerns over the impact of crypto trading on the country’s foreign exchange market, the chairman of the Economic and Financial Crimes Commission (EFFC) highlighted the role of transactions on P2P platforms like KuCoin in exacerbating these challenges. The EFFC reported freezing approximately 300 suspected illegal forex accounts linked to P2P platforms, with over $15 billion passing through one of these platforms in the last year.
The Nigerian government has adopted a stringent stance towards crypto trading in an effort to stabilize the foreign exchange market. Initially blaming currency traders’ speculative activities on the crypto exchange Binance for the weakening value of the Nigerian Naira against the US Dollar, the government has taken legal action against the exchange and two of its executives for tax evasion and money laundering. Despite denying these accusations, Binance has assured cooperation with the authorities and called for the release of its detained employees.
The crackdown on crypto trading in Nigeria reflects the government’s efforts to regulate the digital asset market and address concerns about its impact on the country’s economy. With regulatory sanctions looming and warnings against illegal crypto transactions, the future of cryptocurrency trading in Nigeria remains uncertain. As authorities continue to investigate P2P platforms and enforce restrictions on crypto-related activities, stakeholders in the industry must navigate the evolving regulatory landscape to ensure compliance and mitigate risks.
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