Nigeria Seeks to Prohibit Peer-to-Peer Trading of Cryptocurrency in Naira

Nigeria is intensifying its actions against cryptocurrencies by considering prohibiting peer-to-peer (P2P) crypto exchanges.

This prohibition would impact P2P cryptocurrency trading involving the Nigerian naira, as reported by Bloomberg on Tuesday (May 7).

The country’s latest measures are aimed at imposing stricter regulations on the cryptocurrency marketplace, which has been associated with the depreciation of the national currency.

According to a recent announcement by Emomotimi Agama, the head of Nigeria’s Securities and Exchange Commission (SEC), the forthcoming rules expected in the near future will target crypto exchanges and digital asset custodians within the industry.

Agama highlighted the necessity of removing the naira from P2P transactions to curb the current market manipulation. He emphasized the collective effort needed due to concerns about P2P traders and their influence on the naira’s exchange rate.

After an almost three-year ban, Nigeria lifted restrictions on crypto transactions last year, but the Central Bank of Nigeria still expressed the need for regulatory oversight of virtual asset service providers (VASPs), including cryptocurrencies and crypto assets, recommending that they seek SEC authorization for operations.

However, bans on crypto platforms such as Binance were enacted earlier this year to control currency speculation that undermined the value of the naira.

Nigerian Central Bank Governor Olayemi Cardoso mentioned Binance in a press conference shortly afterwards, while announcing an unprecedented interest rate hike aimed at bolstering the naira.

Cardoso condemned the “illicit flows” through Binance in Nigeria, amounting to $26 billion from unidentifiable sources and users.

Subsequent to these events, Nigerian officials detained two executives visiting from the crypto exchange on allegations of tax evasion, currency speculation, and money laundering.

Nadeem Anjarwalla, a British Kenyan and Binance’s African regional manager, managed to leave the country before being found in Kenya. Meanwhile, Binance’s head of financial crime compliance, Tigran Gambaryan, remains detained in Nigeria pending trial.

Binance CEO Richard Teng made a public appeal in a recent blog post for Gambaryan’s release and criticized the Nigerian government’s handling of the situation.

Teng argued that detaining mid-level company employees who came for collaborative policy discussions sets a threatening new standard for all global businesses.