A new crypto regulation that will ban peer-to-peer trading of cryptocurrencies is in the works in Nigeria according to local publications.
According to sources within the Nigerian tech ecosystem, the ban will soon be made public after the country’s National Security Adviser (NSA) classified crypto trading as a national security issue.
Already, three Nigerian fintech startups:
- MoniePoint
- Paga and
- PalmPay
will block the accounts of customers dealing in cryptocurrency and report those transactions to law enforcement. According to Moniepoint CEO, Tosin Eniolorunda, the NSA asked them to stop onboarding accounts participating in crypto trading.
“Customers can easily open Tier 3 accounts on fintech platforms in seconds,” said Eniolorunda at a conference in Lagos.
“The NSA found a lot of accounts [that were involved in crypto trading] and blocked the accounts. They were worried that fintechs are rapid [in opening accounts] and told us to stop onboarding.”
Exchanges operating in the country have been under scrutiny as authorities believe that crypto platforms facilitate speculation and potential manipulation of exchange rates. In late February 2024, the government ordered several services, including Coinbase, Quidax, and Binance, to stop operations.
REGULATION | Crypto Exchanges to Stop StableCoin Sales in Nigeria Amid Apparent Crackdown
“There was a meeting of crypto founders on Tuesday [February 27 2024] morning, and a number of them agreed to suspend the trades on their platform,” a person at that meeting told a local… pic.twitter.com/iiYBuYrpOu
— BitKE (@BitcoinKE) February 29, 2024
Binance has been in the eye of the storm, being accused of money laundering and tax evasion. Olayemi Cardoso, the Central Bank of Nigeria (CNB) Governor, alleged that ‘$26 billion has passed through Binance Nigeria from sources and users we cannot identify.’
Binance and its executives, including Tigran Gambaryan, a U.S. citizen serving as Head of Financial Crime Compliance, and Nadeem Anjarwalla, a British-Kenyan Regional Manager for Africa at Binance, are facing four counts of tax evasion in the country.
🇳🇬REGULATION | Binance Executive to be Remanded After Pleading Not Guilty to Money Laundering Charges
Gambaryan is set to be held in Kuje Correctional Centre until the determination of his bail application on April 18 2024. The judge has adjourned the case to May 2 2024 for the… pic.twitter.com/6bxUcQGv4A
— BitKE (@BitcoinKE) April 9, 2024
Should a ban materialize, it would be the second time the West African nation is enacting a ban on crypto operations. Back In February 2021 as cryptocurrencies were getting popular, the Central Bank of Nigeria issued an order for local banks to close accounts transacting in or operating cryptocurrency exchanges.
Although the 2021 ban was lifted in December 2023, it did not take long for a renewed crackdown that once again has operators wary of Nigerian market.
🇳🇬REGULATION | The Central Bank of #Nigeria Lifts the 2021 Banking Restrictions on Cryptocurrency Exchanges and VASPs
In a circular sent to the banks and financial institutions in Nigeria, the Central Bank (CBN) guided that the new regulation supersedes previous instructions on… pic.twitter.com/FDkUDbDTuh
— BitKE (@BitcoinKE) December 23, 2023
