Nigeria to Stop P2P Crypto Trading over Naira Devaluation Concerns

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As a researcher with a background in finance and experience living in West Africa, I’m closely following the developments surrounding Nigeria’s potential ban on Peer-to-Peer (P2P) trading of cryptocurrencies using the Naira (NGN). The Nigerian Securities and Exchange Commission’s (SEC) decision to delist the naira from these platforms is a significant move that will impact various players in the crypto asset landscape.

The Nigerian publication, The Guardian reports that Nigeria is moving to prohibit Peer-to-Peer (P2P) trading of cryptocurrencies using the Naira (NGN), the local currency. The Securities and Exchange Commission (SEC) in the region has decided to remove the NGN from such platforms due to stated reasons.

P2P Trading Ban: Key Reasons

At a recent virtual gathering of blockchain influencers and fintech specialists on Monday, the Commission’s Director General, Emomotimi Agama, announced that a new regulatory rule is imminently approaching. This proposed legislation could significantly impact crypto exchanges, digital asset guardians, and other entities operating in the cryptocurrency marketplace.

Typically, Peer-to-Peer (P2P) cryptocurrency platforms enable investors to trade directly with each other, eliminating the requirement for an intermediary. This simplifies the process, allowing traders to negotiate prices between themselves.

Agama pointed out that it’s necessary to remove the naira from the Peer-to-Peer (P2P) trading space to prevent manipulation. The growing apprehensions about crypto traders in the P2P market and their potential influence on the naira exchange rate have highlighted the importance of taking decisive action together.

A recent turn of events unfolds as Nigeria criticizes the digital asset sector for weakening the naira. Following the Nigerian government’s relaxation of currency regulations in June 2023 to boost the fiat’s appeal to foreign investors, the naira has experienced a significant depreciation, losing approximately 65% of its value against the US dollar.

Numerous Nigerians have recently adopted cryptocurrencies as a protective measure against the economic downturn brought about by the naira’s devaluation. However, this shift towards cryptocurrencies raises concerns, including potential illegal activities on these digital platforms. As a result, regulatory bodies have increased their monitoring and scrutiny over crypto exchanges in the country.

Binance Caught in Regulatory Strain in Nigeria

As a analyst, I’d rephrase it as follows: Two months ago, I, Binance, made the decision to halt all services involving the Nigerian naira (NGN). Consequently, withdrawals in NGN were suspended after March 8, and any remaining NGN balances were converted automatically into Tether (USDT) stablecoins.

A few weeks following the detention of two Binance executives, Nadeem Anjarwalla and Tigran Gambaryan, for tax evasion and other criminal charges, Binance temporarily halted its operations. Anjarwalla, who was granted a prayer request while in police custody, managed to flee and was later found in Kenya using his Kenyan passport. His British passport remains confiscated.

Following that incident, the Nigerian authorities have collaborated with INTERPOL to apprehend Anjarwalla in Kenya for extradition. Furthermore, they are pursuing a hefty fine of approximately $10 billion from Binance – an amount surpassing the $4.3 billion penalty imposed by the US DOJ last year.

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2024-05-07 14:36