In a bid to combat exchange rate manipulation and curb dollar racketeering, the Federal Government, through the Securities and Exchange Commission (SEC), is taking decisive action by delisting the naira from all peer-to-peer crypto platforms.
The move follows recent efforts by the government to regulate Nigeria’s burgeoning crypto market, estimated at $57 billion. Emomotimi Agama, the newly-appointed Director-General of the Commission, revealed this plan during a meeting with members of the Nigerian blockchain industry organized by the Blockchain Industry Coordinating Committee of Nigeria.
Agama emphasized the necessity of drafting new regulations to govern the crypto sector, citing alleged manipulation of the naira and exchange rates through peer-to-peer (P2P) platforms. He urged cooperation from the local crypto community in addressing these issues, stating, “That is one of the things that must be done to save this space; the delisting of the naira from the P2P platforms to avoid the level of manipulation that is currently happening.”
The announcement comes on the heels of the Central Bank of Nigeria’s directive to payment service banks to warn customers against engaging in crypto transactions. Some local exchanges, including OKX, Bitbarter, and others under the membership of the Blockchain Technology Association of Nigeria, have already ceased naira services in solidarity with the government.
While urging members of the crypto community to report manipulative practices, Agama emphasized the government’s commitment to tackling bad actors in the industry. He underscored the importance of patriotism and emphasized the SEC’s intention to create an innovative digital asset regulatory regime to position Nigeria as Africa’s digital asset powerhouse.
The meeting, scheduled to address concerns regarding crypto peer-to-peer traders’ impact on the naira, aligns with Nigeria’s growing volume of crypto transactions, which reached $56.7 billion between July 2022 and June 2023.
Stakeholders, including the Fintech Association of Nigeria and the Blockchain Industry Coordinating Committee of Nigeria, expressed support for the SEC’s actions. They emphasized the need for compliance, removal of bad actors, and encouragement of innovation to drive foreign investment and foster industry growth.
However, recent regulatory actions also affected major fintech firms, with the Central Bank suspending new customer onboarding for firms undergoing Know-Your-Customer audits. Fintechs like Opay and PalmPay have warned customers against crypto trading on their platforms to comply with regulations.
The government’s clampdown on cryptocurrency activities intensified following concerns over the activities of Binance, the world’s largest cryptocurrency exchange, and its impact on the naira’s depreciation. Presidential spokesman Bayo Onanuga warned against the potential economic sabotage by Binance, stressing the government’s resolve to prevent such actions.
The move to exclude the naira from crypto trading platforms underscores the government’s commitment to regulating the crypto market and safeguarding the nation’s economic interests. As stakeholders collaborate to address challenges and promote compliance, the future of Nigeria’s crypto industry remains at the forefront of regulatory efforts.
