Unique: P2P crypto ban imminent as Nigeria calls crypto a nationwide safety subject

Unique: P2P crypto ban imminent as Nigeria calls crypto a nationwide safety subject

Not less than three Nigerian fintech startups—Moniepoint, Paga and Palmpay—will block the accounts of consumers dealing in cryptocurrency and report these transactions to legislation enforcement after Nigeria’s Nationwide Safety Adviser (NSA) labeled crypto buying and selling as a nationwide safety subject. 

That designation means a brand new crypto regulation that may ban peer-to-peer buying and selling of cryptocurrencies is within the works, stated Tosin Eniolorunda, the CEO of Moniepoint. 

One other particular person with data of the conversations instructed TechCabal {that a} regulation to ban p2p buying and selling will quickly be made public. 

If the ban occurs, it’ll signify a significant regulatory shift after the Bola Tinubu administration initially softened its stance on crypto. In December 2023, the Central Financial institution lifted a two-year ban on cryptocurrency transactions, and at the least three crypto exchanges had been in talks with the Securities and Trade Fee (SEC) over a crypto license. 

But, the early successes have been reversed and previously two months, authorities have blamed a unstable FX regime on crypto speculators.

The rationale for a ban on p2p buying and selling is linked to the Central Financial institution’s perception that crypto merchants use peer-to-peer buying and selling to govern the naira by way of a pump-and-dump technique. In February 2024, the Central Financial institution Governor, Olayemi Cardoso, claimed $26 billion in untraceable transactions had been processed by Binance. 

It led to a crackdown on the worldwide alternate Binance and the freezing of over 1,000 bank accounts concerned in peer-to-peer transactions. But authorities have gone even additional. 

Final week, TechCabal solely reported that four prominent fintechs had been directed to cease opening new buyer accounts. On the time, it was unclear if the directive was from the Financial and Monetary Crimes Fee or the NSA. A spokesperson for the NSA denied any reference to the incident. 

On Thursday, Tosin Eniolorunda, the CEO of Moniepoint, confirmed that the NSA ordered the pause in new buyer signups. 

“Clients can simply open Tier 3 accounts on fintech platforms in seconds,” he stated on the TMT Enterprise Legislation convention in Lagos.

“The NSA discovered lots of accounts [that were involved in crypto trading] and blocked the accounts. They had been fearful that fintechs are speedy [in opening accounts] and instructed us to cease onboarding.”

A spokesperson for the NSA declined to remark. 

These easy-to-open accounts, made attainable by relaxed guidelines to reinforce monetary inclusion, have come beneath scrutiny within the final 12 months. Conventional banks claimed that these accounts had been typically conduits for cash fraudulently obtained by unhealthy actors. 

In December 2023, the Central Financial institution amended those rules, giving fintech startups a deadline of March 2024 to request identification for all lessons of accounts. 

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