To implement new regulations, the Nigerian government intends to prohibit peer-to-peer (P2P) cryptocurrency exchanges that utilize the Nigerian naira (NGN), the national currency.
Bloomberg reported on May 7 that “in the coming days,” Nigeria’s Securities and Exchange Commission (SEC) will unveil a new regulatory framework for cryptocurrency exchanges, custodians, and other industry firms.
Agama, director general of the SEC, stated that the new regulations aim to safeguard the local currency, the naira, from manipulation by delisting it from P2P exchanges. His statement read:
“Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action.”
Following the February 2024 arrests of its executives, Tigran Gambaryan and Nadeem Anjarwalla, and a local prohibition imposed on the global cryptocurrency exchange Binance, this development has transpired.
On May 17, Gambaryan, incarcerated at the Kuje correctional center in Abuja, the capital of Nigeria, will appear in court on charges including money laundering, currency speculation, and tax evasion.
Users can seamlessly transition between CEX and P2P by utilizing the P2P marketplaces of major CEX platforms such as Binance. In March 2024, however, Binance discontinued the naira from its peer-to-peer service in response to the Nigerian government’s severe assault on the exchange.
Despite discontinuing the naira from its peer-to-peer service, Binance and its executives encountered persistent regulatory scrutiny in Nigeria, which resulted in Gambaryan’s apprehension and imprisonment.
Binance CEO Richard Teng issued comprehensive documentation regarding Gambaryan’s apprehension on May 7. In doing so, he denounced the detention of two of its employees by the Nigerian government, stating that it had “established a perilous new precedent for all companies globally.”
The intended P2P ban and Binance’s regulatory precedent in Nigeria do not indicate that P2P cryptocurrency trading will cease to exist permanently.
Nigerians could continue to conduct transactions on P2P marketplaces utilizing the U.S. dollar. Some industry advocates assert that prohibiting P2P is similarly tricky, if possible.
