Key takeaways:
- Nigeria’s government is preparing to enact new laws to outlaw P2P crypto exchanges using the country’s naira.
- The new rules are intended to keep the local currency safe from manipulation by delisting the naira from P2P exchanges.
Nigeria’s government is preparing to enact new laws to outlaw peer-to-peer (P2P) cryptocurrency exchanges using the country’s naira.
Bloomberg reported on Tuesday that Nigeria’s Securities and Exchange Commission (SEC) planned to introduce a new regulatory framework “in the coming days” for custodians, cryptocurrency exchanges, and other industry companies.
The new rules, according to SEC Director General Emomotimi Agama, are intended to keep the local currency safe from manipulation by delisting the naira from P2P exchanges. He said:
“Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action.”
The announcement comes after the international cryptocurrency exchange Binance was subject to a local ban and its executives, Tigran Gambaryan and Nadeem Anjarwalla, were detained in Nigeria in February 2024.
Gambaryan, who was imprisoned in the Kuje correctional facility in Abuja, Nigeria, is scheduled to go on trial on May 17 on allegations of money laundering, currency speculation, and tax evasion.
Users can seamlessly transition between CEX and P2P when necessary, as major CEX platforms such as Binance feature their own P2P marketplaces. Nonetheless, in March 2024, Binance eliminated the naira from its peer-to-peer platform due to a significant crackdown on the exchange by the Nigerian government.
Regulators in Nigeria kept pressuring Binance and its management to remove the naira from its P2P service, which kept Gambaryan detained and imprisoned.
After detaining two of Binance’s employees, the Nigerian government was accused of “setting a dangerous new precedent for all companies worldwide,” as Binance CEO Richard Teng stated when he revealed comprehensive records of Gambaryan’s imprisonment on May 7.
Notwithstanding the anticipated P2P prohibition and Binance’s regulatory history in Nigeria, P2P cryptocurrency trading is not expected to disappear from the nation permanently.
It appears that Nigerians will still be able to transact with US dollars on peer-to-peer marketplaces. Proponents of the sector claim that it is difficult to outlaw P2P.
