Nigerian authorities have taken a firm stance on crypto trading, with a recent focus on peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A trending circular on social media has been circulating, detailing the Central Bank of Nigeria’s (CBN) directive for financial institutions to identify and impose restrictions on individuals or entities transacting with these exchanges. The CBN has labeled the circular as “fake content,” but the crackdown seems to be in motion.
It is not uncommon for Nigerian authorities to backtrack on unpopular policies, as seen in the past. The CBN’s order for financial institutions to place a six-month Post No Debit (PND) instruction on accounts associated with unlicensed crypto exchanges indicates a shift towards a more stringent regulatory environment. Defaulters of this directive will face severe regulatory sanctions, emphasizing the gravity of the situation.
The CBN’s warning against individuals engaging in “illegal” USDT transactions and the subsequent threat of arrest highlights the government’s strong stance against unauthorized crypto activities. The Economic and Financial Crimes Commission (EFFC) has already taken action by freezing suspected illegal forex accounts linked to P2P platforms like KuCoin. With over $15 billion passing through these platforms in the last year, the government is focused on mitigating foreign exchange challenges exacerbated by such transactions.
Binance, one of the prominent crypto exchanges under scrutiny, has been accused of contributing to the devaluation of the Nigerian Naira against the US Dollar. Despite denying these allegations, the exchange and two of its executives are facing trial for tax evasion and money laundering. Binance’s cooperation with authorities and plea for the release of its detained employees indicate a complex legal battle ahead.
As Nigeria intensifies its crackdown on crypto trading, the regulatory landscape for digital assets is evolving rapidly. The government’s efforts to stabilize the foreign exchange market come at a cost for unlicensed exchanges and traders engaging in illicit activities. The ongoing legal battles and enforcement actions underscore the challenges and uncertainties facing the crypto industry in Nigeria.
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