Nigeria poised to outlaw P2P crypto trading over nationwide security concerns

Nigeria’s National Safety Adviser (NSA) is living to label crypto trading as a nationwide security risk, signaling an impending crackdown on gaze-to-gaze (P2P) crypto transactions, in step with native media stories and CryptoSlate sources.

The rush follows the choice of on the least three predominant Nigerian fintech startups — Moniepoint, Paga, and Palmpay — to dam accounts taking into consideration crypto dealings and describe such activities to regulation enforcement.

In response to Moniepoint CEO Tosin Eniolorunda, the NSA’s classification is anticipated to pave the near for nonetheless rules banning P2P crypto trading, with an first fee announcement anticipated soon.

This represents a notable shift in regulatory stance, in particular after the Bola Tinubu administration had beforehand shown a extra lenient attitude in direction of crypto. In actuality, in December 2023, the Central Financial institution of Nigeria lifted a two-twelve months ban on crypto transactions, hinting at a extra welcoming regulatory atmosphere.

Nonetheless, fresh months gain seen a reversal on this pattern, with authorities blaming crypto speculators for exacerbating the volatility of the foreign alternate (FX) market. The proposed ban on P2P trading is in step with the Central Financial institution’s assertion that crypto merchants exploit this as regards to manipulate the Nigerian naira by pump-and-dump schemes.

Central Financial institution Governor Olayemi Cardoso alleged in February 2024 that Binance had facilitated $26 billion in untraceable transactions, resulting in a crackdown on the alternate and the freezing of over 1,000 bank accounts linked to P2P transactions.

In a linked style, four outstanding fintech firms were impartial not too lengthy in the past directed to discontinuance the outlet of as much as the moment buyer accounts, even supposing the source of this directive stays unclear.

Moniepoint’s CEO, Tosin Eniolorunda, confirmed that the rush used to be on the behest of the NSA, who expressed concerns over the convenience with which fintech platforms facilitate yarn openings, in particular Tier 3 accounts.

While a spokesperson for the NSA declined to form additional minute print, this style highlights the growing scrutiny over the instant proliferation of accounts facilitated by fintech startups. Passe banks gain lengthy raised concerns that such accounts relief as conduits for illicit funds.

Responding to those concerns, the Central Financial institution amended its tips in December 2023, mandating fintech startups to ascertain the identities of all yarn holders by March 2024.

As Nigeria braces for additional regulatory measures in the crypto set, the fate of P2P trading stays unsure amid mounting nationwide security concerns and evolving regulatory landscapes.