Recent reports reveal that Nigerian authorities are ramping up their efforts to crack down on crypto trading in the country, specifically targeting peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit. A circulating document on social media platforms has highlighted the Central Bank of Nigeria’s (CBN) directive to financial institutions to identify individuals or entities involved in transactions with these exchanges. The CBN has also instructed these institutions to implement a six-month Post No Debit (PND) instruction on the accounts of such individuals or entities. Failure to comply with this directive may result in severe regulatory sanctions.
The CBN has clarified that the mentioned platforms are not licensed to operate in Nigeria and are currently under investigation. Moreover, the bank has issued a warning against individuals engaging in the illegal buying and selling of USDT, stating that such individuals will face arrest. The CBN has reminded regulated financial entities in the country that they are prohibited from dealing in cryptocurrencies or facilitating payments for crypto exchanges. It is crucial for these entities to adhere to regulations set forth by the Nigerian Securities and Exchange Commission (SEC) when operating in the crypto market.
The Chairman of the Economic and Financial Crimes Commission (EFFC) highlighted that transactions on P2P platforms like KuCoin have been exacerbating Nigeria’s foreign exchange challenges. The EFFC reported freezing approximately 300 suspected illegal forex accounts associated with trading on these platforms. It is noteworthy that over $15 billion transacted through one of these platforms in the past year. These actions signify the Nigerian government’s commitment to stabilizing the foreign exchange market by cracking down on illicit activities related to crypto trading.
The Nigerian government initially linked the weakening value of the Nigerian Naira against the US Dollar to speculative activities on crypto exchange, Binance. Despite denying these allegations, Binance is currently facing trial, alongside two of its executives, on charges of tax evasion and money laundering. The exchange has reaffirmed its cooperation with authorities and urged for the release of its detained employees as the legal proceedings unfold.
The regulatory landscape surrounding crypto trading in Nigeria is evolving, with authorities taking proactive measures to address illicit activities and stabilize the foreign exchange market. It is imperative for individuals and entities involved in crypto trading to adhere to regulatory guidelines and cooperate with law enforcement to ensure a transparent and compliant marketplace.
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