Nigeria appears to be on the verge of outlawing peer-to-peer (P2P) cryptocurrency trading due to national security worries, as the country’s National Security Adviser (NSA) prepares to classify crypto trading as a threat. This move comes after several Nigerian fintech startups, including Moniepoint, Paga, and Palmpay, have already taken action by blocking accounts involved in crypto transactions and reporting them to law enforcement. Moniepoint’s CEO, Tosin Eniolorunda, has confirmed that the NSA’s classification is expected to pave the way for new regulations prohibiting P2P crypto trading, with an official announcement expected soon.
This development marks a significant shift in regulatory stance, as the Nigerian government had previously exhibited a more lenient attitude toward crypto, exemplified by the Central Bank of Nigeria lifting a two-year ban on crypto transactions in December 2023. However, the recent months have witnessed a change in tone, with authorities blaming crypto speculators for exacerbating the volatility of the foreign exchange market. The proposed ban on P2P trading is based on the Central Bank’s claim that crypto traders manipulate the Nigerian naira through pump-and-dump schemes using this method.
In February 2024, Central Bank Governor Olayemi Cardoso alleged that Binance had facilitated $26 billion in untraceable transactions, leading to the crackdown on the exchange and the freezing of over 1,000 bank accounts connected to P2P transactions. Additionally, four prominent fintech firms were recently directed to halt the opening of new customer accounts, although the origin of this directive remains unclear. The NSA expressed concerns about how easily fintech platforms facilitate account openings, particularly Tier 3 accounts, prompting the action.
While the details of the impending ban and regulatory measures remain unclear, it is evident that Nigeria is intensifying its scrutiny of the crypto sector due to mounting national security concerns and evolving regulatory landscapes. With the fate of P2P trading hanging in the balance, the Nigerian crypto community awaits official announcements that will shape the future of cryptocurrency in the country.