Nigeria is gearing up to introduce new regulations that will effectively ban peer-to-peer (P2P) cryptocurrency trading using the national currency, the Nigerian naira. The Securities and Exchange Commission (SEC) of Nigeria announced on May 7 that it is on the verge of unveiling a comprehensive regulatory framework tailored for crypto exchanges, custodians, and other industry entities.
Emomotimi Agama, the Director General of SEC, highlighted that the impending regulations are intended to remove the naira from P2P exchanges, citing concerns over its vulnerability to manipulation. Agama stressed the necessity for collective action in addressing recent apprehensions regarding crypto P2P traders and their perceived impact on the naira’s exchange rate.
Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action.
Nigeria Relentless Fight with Crypto
This development comes in the wake of a local ban imposed on global cryptocurrency exchange Binance, coupled with the arrests of its executives, Tigran Gambaryan and Nadeem Anjarwalla, in Nigeria in February 2024. Gambaryan, currently detained at the Kuje correctional center in Abuja, is scheduled to stand trial on May 17, facing charges ranging from tax evasion to currency speculation and money laundering.
While major centralized exchange (CEX) platforms like Binance typically offer their own P2P marketplaces, allowing users to seamlessly transition between CEX and P2P trading, Binance took proactive measures by removing the naira from its P2P service in March 2024 amidst the Nigerian government’s intensified crackdown on the exchange. Despite this move, regulatory pressure persisted, resulting in the continued detention of Gambaryan and his colleague.
On May 7, Binance CEO Richard Teng denounced the Nigerian government’s actions, condemning the detention of its employees as a dangerous precedent with far-reaching implications for companies globally. However, the regulatory measures and P2P ban in Nigeria do not signify the end of P2P crypto trading in the country. Nigerians may still have avenues to engage in P2P trading using alternative currencies such as the US dollar.
Industry advocates suggest that completely banning P2P trading may prove challenging, if not impossible, underscoring the resilience and adaptability of Nigeria’s crypto community amidst evolving regulatory landscapes. As Nigeria navigates these regulatory shifts, stakeholders await further clarity on the implications and enforcement of the proposed regulations in the country’s crypto ecosystem.
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