A crackdown on peer-to-peer (P2P) crypto transactions is imminent, with Nigeria's National Security Adviser (NSA) planning to designate crypto transactions as a national security threat, according to local media reports and CryptoSlate sources. It suggests.
The move follows decisions by at least three major Nigerian fintech startups (Moniepoint, Paga, and Palmpay) to block accounts involved in cryptocurrency transactions and report such activities to law enforcement authorities. It is.
According to Moniepoint CEO Tosin Eniolorunda, the NSA classification is expected to pave the way for new regulations banning P2P cryptocurrency transactions, with an official announcement expected soon.
This marks a notable change in regulatory stance, especially since the Bola Tinubu administration previously took a more lenient stance towards cryptocurrencies. In fact, in December 2023, the Central Bank of Nigeria lifted his two-year ban on crypto trading, suggesting a more welcoming regulatory environment.
However, this trend has reversed in recent months, with authorities blaming crypto speculators for exacerbating volatility in the foreign exchange (FX) market. The proposed ban on P2P trading is based on the central bank's claims that crypto traders are abusing this technique to manipulate the Nigerian naira in a pump-and-dump manner.
Central Bank Governor Olayemi Cardoso claimed in February 2024 that Binance facilitated $26 billion in untraceable transactions, leading to a crackdown on the exchange and the freezing of more than 1,000 bank accounts related to P2P transactions. .
In this context, four prominent fintech companies were recently instructed to stop opening new customer accounts, although the origin of this instruction remains unclear.
Moniepoint CEO Tosin Eniolorunda confirmed that the move was at the behest of the NSA, which expressed concern about fintech platforms, especially the ease of opening Tier 3 accounts.
An NSA spokesperson declined to provide further details, but the move highlights increased scrutiny of the rapid proliferation of accounts facilitated by fintech startups. Traditional banks have long expressed concerns that such accounts serve as conduits for illicit funds.
In response to these concerns, the central bank revised its rules in December 2023 to require fintech startups to verify the identity of all account holders by March 2024.
As Nigeria prepares for further regulatory measures in the crypto space, the fate of P2P transactions remains uncertain amidst growing national security concerns and an evolving regulatory landscape.
