Nigeria is gearing up to implement new regulations aimed at prohibiting peer-to-peer (P2P) cryptocurrency exchange involving the national currency, the Nigerian naira.
The Securities and Exchange Commission (SEC) of Nigeria is on the verge of introducing a fresh regulatory framework for crypto exchanges, custodians, and other entities within the industry, as reported by Bloomberg on May 7.
SEC Director General Emomotimi Agama emphasized that the forthcoming regulations intend to remove the naira from P2P exchanges to safeguard the local currency from potential manipulation. Agama stated:
"Recent concerns surrounding crypto P2P traders and their perceived impact on the naira exchange rate have highlighted the necessity for collective action."
This development comes in the wake of a local ban imposed on the global cryptocurrency exchange Binance and the subsequent arrests of its executives, Tigran Gambaryan and Nadeem Anjarwalla, in Nigeria in February 2024.
Gambaryan, currently detained at the Kuje correctional center in Abuja, Nigeria's capital, is scheduled to stand trial on May 17, facing charges related to tax evasion, currency speculation, and money laundering.
While major centralized exchange (CEX) platforms like Binance offer their own P2P marketplaces, facilitating transitions between CEX and P2P, Binance ceased naira support on its P2P service in March 2024 amid Nigeria's intensified crackdown on the exchange.
On May 7, Binance CEO Richard Teng released extensive documentation detailing Gambaryan's detention, condemning the Nigerian government for "establishing a dangerous new precedent for all companies worldwide" through the detention of two of its employees.
However, Binance's regulatory actions in Nigeria and the impending P2P ban don't necessarily spell the end of P2P crypto trading in the country.
It appears that Nigerians would still have the option to engage in trading on P2P platforms using the U.S. dollar. Some industry advocates suggest that banning P2P trading is challenging, if not entirely impossible.
May 2024, Cryptoniteuae