Nigeria’s National Security Adviser (NSA) to Crack Down on Crypto Trading Amid National Security Concerns
Nigeria’s National Security Adviser (NSA) is reportedly gearing up to designate crypto trading as a national security threat, marking a shift towards a potential crackdown on peer-to-peer (P2P) crypto transactions. This move comes after three major Nigerian fintech startups – Moniepoint, Paga, and Palmpay – decided to block accounts engaged in crypto activities and report them to law enforcement.
Moniepoint CEO, Tosin Eniolorunda, stated that the NSA’s classification is expected to lead to new regulations prohibiting P2P crypto trading, with an official announcement expected soon. This marks a departure from a more welcoming regulatory approach taken by the Bola Tinubu administration in December 2023 when the Central Bank of Nigeria lifted a two-year ban on crypto transactions.
However, recent months have seen a change in regulatory stance, with authorities attributing the volatility of the foreign exchange (FX) market to crypto speculators. The proposed ban on P2P trading is based on the Central Bank’s claim that crypto traders use this method to manipulate the Nigerian naira through pump-and-dump schemes.
Central Bank Governor, Olayemi Cardoso, alleged in February 2024 that Binance had facilitated $26 billion in untraceable transactions, leading to the freezing of over 1,000 bank accounts linked to P2P transactions. In addition, four major fintech firms have been instructed to stop opening new customer accounts, with the directive reportedly coming from the NSA.
While details from the NSA remain limited, concerns have been raised over the ease with which fintech platforms facilitate account openings, particularly for Tier 3 accounts. In response to these concerns, the Central Bank amended its rules in December 2023, mandating fintech startups to verify the identities of all account holders by March 2024.
Amidst growing national security worries and evolving regulatory frameworks, the fate of P2P trading in Nigeria hangs in the balance as the country braces for further regulatory measures in the crypto space.
