The Nigerian government is ramping up its efforts to crack down on crypto trading by focusing on peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A circulating document on social media revealed that the Central Bank of Nigeria (CBN) has ordered financial institutions to identify individuals or entities dealing with these exchanges and impose a six-month Post No Debit (PND) instruction on their accounts. While the CBN has discredited the authenticity of the circular, warning of severe regulatory sanctions for non-compliance, the crackdown on crypto trading in Nigeria appears to be gaining momentum.
The CBN has a clear stance on cryptocurrency trading in Nigeria, prohibiting regulated financial entities from engaging in crypto transactions or facilitating payments for crypto exchanges. The official position is that only entities regulated by the Nigerian Securities and Exchange Commission (SEC) in the crypto market can interact with banks. This regulatory framework is aimed at maintaining stability in the foreign exchange market and preventing illicit financial activities facilitated by P2P platforms like KuCoin.
The Economic and Financial Crimes Commission (EFFC) has also joined the crackdown on crypto trading by freezing hundreds of suspected illegal forex accounts linked to P2P platforms. The EFCC chair, Ola Olukayode, highlighted the role of transactions on platforms like KuCoin in exacerbating Nigeria’s foreign exchange challenges. With over $15 billion flowing through these platforms in the last year, the government is taking decisive action to curb illicit financial activities and stabilize the economy.
Binance, one of the targeted crypto exchanges, is facing legal challenges in Nigeria, with allegations of tax evasion and money laundering. Despite denying these accusations, Binance is cooperating with the authorities and advocating for the release of its detained employees. The ongoing legal battle underscores the Nigerian government’s commitment to enforcing strict regulations on crypto trading to safeguard the country’s financial stability.
The Nigerian government’s crackdown on crypto trading, particularly on P2P platforms, reflects its determination to regulate the digital asset market and combat financial crimes. By targeting unlicensed exchanges and imposing stringent measures on individuals involved in crypto transactions, Nigeria aims to protect its economy from speculative activities and illicit financial practices. While the regulatory landscape may continue to evolve, the government’s proactive approach to monitoring crypto trading signals a new era of oversight in the digital asset space.
