Nigeria Cracks Down on Crypto: Naira to Be Banned from Peer-to-Peer Trading

The Nigerian government is planning new regulations to prohibit the use of the national currency, the naira, in peer-to-peer (P2P) cryptocurrency exchanges. Nigeria’s Securities and Exchange Commission (SEC) will soon unveil a new set of rules governing crypto exchanges, custodians, and other related businesses, according to a Bloomberg report on May 7.

SEC Director General Emomotimi Agama explained that the forthcoming regulations aim to remove the naira from P2P exchanges to safeguard the local currency against manipulation. He highlighted the growing concerns around the perceived impact of P2P crypto traders on the naira’s exchange rate, emphasizing the need for collective action.

The development follows a recent ban on global crypto exchange Binance and the arrest of two of its executives, Tigran Gambaryan and Nadeem Anjarwalla, in February 2024. Gambaryan, currently detained at Abuja’s Kuje correctional facility, is scheduled for trial on May 17 on charges of tax evasion, currency speculation, and money laundering.

Binance, known for operating both centralized exchanges (CEX) and P2P marketplaces, had already stopped supporting the naira in March 2024 in response to increased regulatory scrutiny. Despite this measure, Gambaryan and his colleagues remained under pressure from Nigerian regulators, leading to his continued detention.

On May 7, Binance CEO Richard Teng criticized the Nigerian government for setting a troubling precedent by detaining the two employees, revealing detailed information about Gambaryan’s detention.

While Nigeria’s regulatory stance and P2P ban present challenges, P2P cryptocurrency trading may still continue in the country using the U.S. dollar. According to some industry experts, a complete ban on P2P trading is challenging, if not impossible.