Nigerian authorities are considering banning cryptocurrency (P2P) trading due to concerns about national security and foreign exchange market manipulation.
The move comes after several major fintech companies blocked cryptocurrency-related accounts and the Central Bank of Nigeria accused exchanges like Binance of facilitating illegal transactions.
According to local sources, the NSA is concerned that P2P transactions are being used to facilitate illegal activities, including money laundering and terrorist financing. Furthermore, the Central Bank of Nigeria (CBN) also expressed concerns about the impact of P2P trading on the stability of the local currency naira, accusing cryptocurrency traders of manipulating the foreign exchange market through through pump-and-dump schemes.
The move follows the decision by several major Nigerian fintech companies, including Moniepoint, Paga and Palmpay on May 3, to limit cryptocurrency-related activities. These companies blocked accounts used for P2P transactions and reported suspicious transactions to law enforcement.
Moniepoint CEO Tosin Eniolorunda said the actions are consistent with the NSA directive and reflect growing concerns about the potential risks associated with cryptocurrencies.
MoniePoint will shut down your account and report you to the authority if you make any attempt to trade cryptocurrencies, NFTs, or other virtual assets via their platform.My question is simple: Does MoniePoint accept deposit and/or withdrawal of cryptocurrencies, NFTs, etc pic.twitter.com/vmlSL09aGN
— BARON (@barryelon) May 3, 2024
The CBN has also taken a tougher stance on cryptocurrencies in recent months. In February, CBN Governor Olayemi Cardoso accused exchange Binance of facilitating $26 billion worth of untraceable transactions, leading to the ban of Binance and the freezing of over 1,000 related bank accounts to P2P trading. Nigeria has temporarily detained two senior Binance employees for investigation.
Although the CBN lifted its two-year ban on cryptocurrency trading in December 2023, recent developments indicate a significant shift in the government's approach towards digital assets. At a time when Nigeria faces economic challenges, including rising inflation and currency fluctuations, authorities appear to be focusing on minimizing the risks associated with cryptocurrencies to protect the country's financial stability.
