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Nigeria Moves to Ban P2P Naira Crypto Trading

Nigeria is reportedly stepping up its cryptocurrency crackdown with a proposed ban on peer-to-peer trading.

The ban would affect P2P trading in the country’s naira, Bloomberg reported Tuesday (May 7).

The move is the latest effort by the West African country to place tighter controls on the crypto sector, which it blames for the decline of its national currency.

The proposed ban came as Emomotimi Agama, director general of Nigeria’s Securities and Exchange Commission (SEC), said new rules would be released “in the coming days,” and would apply to crypto exchanges, digital asset custodians and other parts of the industry, per the report.

“The thing that needs to be done is delisting the naira from the P2P space in order to avoid the level of manipulation that is currently happening,” Agama said, according to the report. “Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action.”

Nigeria last year lifted a nearly 3-year-old ban on transacting in cryptocurrencies, although the Central Bank of Nigeria still expressed a need to regulate virtual asset service providers (VASPs), including cryptocurrencies and crypto assets. The bank put forth new guidelines that stressed the need for VASPs to get permission from the SEC to engage in crypto business.

But earlier this year, the country began banning crypto platforms such as Binance in a bid to rein in currency speculation that had devalued the naira.

Nigerian Central Bank Governor Olayemi Cardoso cited Binance during a press conference soon after as he announced a record interest rate hike to help shore up the naira.

Criticizing “illicit flows,” Cardoso said $26 billion had passed through Binance in Nigeria “from sources and users who we cannot adequately identify.”

Days later, Nigerian authorities arrested two visiting executives from the crypto exchange, accusing them and their company of tax evasion, currency speculation and money laundering.

One of those executives, Nadeem Anjarwalla, a British Kenyan who is Binance’s regional manager for Africa, apparently escaped in March before being located in Kenya in April.

The other executive, Binance’s head of financial crime compliance, Tigran Gambaryan, is still in custody in Nigeria and awaiting trial.

Binance CEO Richard Teng published a blog post Tuesday calling for Gambaryan’s release, while also criticizing the Nigerian government’s conduct.

“To invite a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide,” he wrote.