Dollar speculation: FG to ban naira from crypto trading platforms

The Securities and Exchange Commission of the Federal Government plans to delist the naira from all peer-to-peer cryptocurrency platforms in an effort to combat dollar racketeers and exchange rate manipulators.

The development took place in the context of the Federal Government of Nigeria's recent efforts to regulate the country's estimated $57 billion cryptocurrency market.

During a Monday discussion with representatives of Nigeria's blockchain business, Emomotimi Agama, the recently appointed Director-General of the Commission, revealed the government's most recent proposal.

The Nigerian Blockchain Industry Coordinating Committee organised the gathering.
Agama stated that new rules governing the cryptocurrency industry are presently being drafted by the government.

P2P platform operators are accused of manipulating the value of the naira and the exchange rate.

Delisting the naira from P2P platforms is one of the things that needs to be done to preserve this area in order to prevent the kind of manipulation that is now taking place. As we implement laws in the upcoming days, I would appreciate your assistance in handling this," the SEC DG informed the local cryptocurrency community.

Just one week had passed since the Central Bank of Nigeria gave payment service banks instructions to warn their clients against transacting in cryptocurrencies when Agama made their announcement.

After creating the Virtual Assets Service Providers Code of Conduct in 2022, SiBAN requested cooperation from the federal government in March in order to implement appropriate regulation.

The SEC DG, however, urged Nigerian cryptocurrency enthusiasts to "name and shame" those responsible for the naira's manipulation.

He insisted that the government was resolved to address the manipulating of the national currency by certain unscrupulous actors in the industry.

"We ask with all sincerity that those involved in sharp practices cease," Agama uttered. We invite you to get in contact with us by outing and humiliating those responsible.

"This community is essential to the future of this country." As regulators, it is in our best interests to support the growth of the fintech industry, and in return, we look to the fintech community to act morally.

One can never wish away patriotism. We must make every effort to avoid doing anything that could bring disgrace to our nation. The worries about cryptocurrency P2P traders and their impact on the naira are crucial and are what sparked this gathering.

He insisted that, with a variety of solutions like real-world asset tokenization, the SEC under his direction was ready for an inventive digital asset regulatory regime that would preserve Nigeria as Africa's digital asset powerhouse.

He claims that this will stimulate the nation's capital market and create wealth.

"We must look for creative solutions to this issue and find the right balance between fostering innovation and defending our country's economic interests," he declared. To help us get the intended outcome, we will do this in a polite but forceful manner.

In light of that, I would like to highlight that we are pursuing a number of strategies to maintain respectable business practices in our industry. Despite the difficulties we all know P2P trading presents, we are here to get to know those operating in the industry fairly. As such, we are interested in hearing your suggestions on how we can manage all obscure cryptocurrency trading activities within our jurisdiction, including P2P.
The government would act decisively on the industry at the planned meeting on Monday.

According to the 2023 Geography of Cryptocurrency Report by Chainalysis, an international blockchain analysis company with its headquarters in the United States, Nigeria's volume of cryptocurrency transactions increased by 9% year over year to $56.7 billion between July 2022 and June 2023.

Stakeholders look to work together.

Dr. Babatunde Obrimah, the Chairman of the Fintech Association of Nigeria, praised the SEC DG in his speech for taking aggressive actions and proposing a cooperation with the ecosystem.

He promised that the association would collaborate with the DG to clean up the virtual ecosystem.

BICCoN, for its part, asked that a working group be established in order to address the different issues that the cryptocurrency industry is facing and advance the sector.

Chukwuemeka Ezike, a co-founder of a local exchange called Bitbarter.io, stated that participants in the ecosystem were prepared to assist and collaborate with the government in order to guarantee that certain concerns regarding the value of the naira were addressed.

He acknowledged that significant resources had been invested in creating these platforms, but added that finding potential solutions would be necessary to support the industry's expansion.

BICCoN Chairman Lucky Uwakwe had stated on Saturday that the organisation would try to work out a compromise with the regulator.

According to Ukakwe, the purpose of the conference is to attempt to get the industry to comply with regulations and get rid of bad actors who misuse technology, particularly in light of the government's concerns. This relates to individuals who manipulate the naira through technology.

Additionally, as demonstrated in other nations like China and the United Arab Emirates, we hope that innovation is promoted rather than inhibited in order to help the industry attract more international investment and support the present administration's efforts to increase foreign investment in the country.

Fintech companies.

Major fintech companies were prevented from onboarding new clients by the CBN last week as part of an ongoing evaluation of their Know-Your-Customer procedure.

Regulators have also expressed concern about fintechs' "Know Your Customer" compliance standards. In order to stop financial crimes including money laundering, financing of terrorism, and fraud, this entails confirming a customer's identification and comprehending their financial activities.

The Nigeria Inter-Bank Settlement System's fraud watch report states that between 2019 and 2023, financial institution clients lost N59.33 billion due to fraud, with losses rising by 496.96 percent over the previous five years.

Major fintech companies, such as Opay and PalmPay, warned their clients via email on Friday not to trade cryptocurrencies or any other virtual currency on their apps in response to the regulatory action. In addition, they made a threat to ban any accounts discovered carrying out these kinds of actions.

A court order has already been obtained by the Economic and Financial Crimes Commission to freeze at least 1,146 bank accounts that belong to different people and businesses that are allegedly involved in illicit foreign currency operations.

On Monday, the suspects' bank account details were enumerated in an 85-page court order (PDF).

In granting the ex-parte motion filed by Ekele Iheanacho, the anti-graft agency's attorney, Justice Emeka Nwite also approved the commission's request to wrap up the probe in ninety days.

"That the applicant's (EFCC) application is hereby granted as prayed," stated a portion of the court document.

"That this honourable court hereby orders the freezing of the bank accounts listed in the schedule below, which are owned by different individuals who are under investigation for the crimes of money laundering, terrorism financing, and unauthorised dealing in foreign exchange, with the investigation lasting for a total of ninety (90) days."

Uju Ogubunka, the president of the Bank Customers Association of Nigeria, supported the Central Bank of Nigeria's decision to halt the creation of new accounts on the impacted platforms.

He claimed that in order to protect the integrity of financial institutions, fintechs and microfinance banks must adhere to the same stringent rules that regulate deposit money banks.

"Anything that can cause disruptions to the system should not be allowed," he declared. I agree with the CBN's ruling if the platforms are being utilised for activities that are prohibited by law. Nothing about that seems improper to me. Companies now have an obligation to properly handle KYC.

Banks and other financial institutions were prohibited from managing accounts for bitcoin service providers by the CBN in 2021.

But the banking watchdog revoked the prohibition in December 2023.

However, new worries about Binance's operations on its peer-to-peer platform—particularly in regards to its price cap on USDT trading—arose in February. Binance is the biggest cryptocurrency exchange globally.

The authorities claimed that their actions had a part in the naira's decline in value.

Binance suspended its naira services on March 8 following the detention of two of its executives by Nigerian authorities.

Presidential spokesman Bayo Onanuga warned that if Binance continued to fix the foreign exchange rate unilaterally, it would ruin the Nigerian economy.

Asserting that the website has been subject to severe action by the government, Onanuga declared, "Binance will destroy this country's economy if we don't clamp down on it." All they do is adjust the rate.

There are sabotage artists among us. Observe the impact Binance is having on our economy. T