Nigeria will ban P2P crypto trading for national security reasons


The NSA’s labelling is likely to make it easier for new rules to be put in place that will ban peer-to-peer crypto trade. An official statement is due soon.

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Media outlets in Nigeria and CryptoSlate have learned that the country’s top security official is planning to declare cryptocurrency trade a danger to national security, opening the way for a crackdown on P2P cryptocurrency transactions.

Moniepoint, Paga, and Palmpay are three prominent Nigerian fintech companies that have already decided to notify and restrict accounts implicated in cryptocurrency transactions to the authorities. This latest development follows their similar decisions.

Tosin Eniolorunda, CEO of Moniepoint, has said that new legislation prohibiting P2P crypto trading is likely to be announced shortly as a result of the NSA’s categorisation.

After the Bola Tinubu administration’s more liberal position towards crypto, there has been a significant change in regulatory policy. Indeed, the Nigerian Central Bank reversed a two-year prohibition on cryptocurrency transactions in December 2023, suggesting a more favourable regulatory climate.

Authorities have recently reversed this trend, attributing the increased volatility of the foreign exchange (FX) market to crypto speculators. According to the Central Bank, crypto traders use P2P trading as a tool for pump-and-dump schemes, which cause the Nigerian naira to fluctuate in value. As a result, the bank is considering banning P2P trading.

In February 2024, Olayemi Cardoso, the governor of the Central Bank of Brazil, made accusations that Binance had enabled $26 billion in anonymous transactions. This led to a crackdown on the exchange and the suspension of more than 1,000 bank accounts associated with P2P transactions.

In a similar matter, it is still unknown who instructed four major fintech companies to stop accepting new customers’ accounts.

According to Tosin Eniolorunda, CEO of Moniepoint, the NSA requested the change because they were worried about how easily fintech platforms might register accounts, especially Tier 3 accounts.

This discovery underscores the growing concern about the fast expansion of accounts enabled by fintech businesses, even if an NSA representative refused to provide any data. For a long time, conventional banks have voiced their worry that these accounts facilitate the transfer of illegal cash.

In December 2023, the Central Bank responded to these concerns by revising its regulations. In March 2024, the new laws would require fintech businesses to confirm the identity of every customer.

The future of peer-to-peer (P2P) trading is unclear in light of growing national security concerns and changing regulatory environments as Nigeria readies itself for further crypto regulatory actions.

Also Read: Crypto firms get $2.4B in early 2024 venture funds

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