Nigeria’s SEC will introduce a new regulatory framework for crypto exchanges and custodians in the coming days.
The Federal Government of Nigeria, through the Securities and Exchange Commission (SEC), is planning to impose a ban on peer-to-peer (P2P) transactions. The proposed ban aims to implement control over the country’s crypto market.
Bloomberg reported on May 7 that the SEC is poised to introduce a new regulatory framework for crypto exchanges, custodians, and other entities in the industry in the coming days.
The Launch of a New Regulatory Framework in a Few Days.
According to the SEC Director General Emomotimi Agama, the upcoming regulations aim to remove the naira from P2P exchanges to safeguard it against manipulation.
“Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action,” he said.
The news comes after Nigeria Banned global crypto exchange Binance and arrested its executives, Tigran Gambaryan and Nadeem Anjarwalla, in February 2024.
Gambaryan is currently held at the Kuje correctional center in Abuja, the country’s capital, and will be tried on May 17 on charges of tax evasion, currency speculation, and money laundering.
Major crypto exchange platforms such as Binance offer P2P marketplaces, which allow users to switch between centralized exchange (CEX) and P2P trading as required. However, Binance discontinued naira support on its P2P service in March 2024. Users expressed their disappointment and dissatisfaction with the news.
Binance Executives Still in Custody.
Despite removing the naira from its P2P service, Binance and its executives have remained under regulatory pressure in Nigeria, which has led to Gambaryan’s continued arrest.
Binance CEO Richard Teng condemned the Nigerian government for detaining two of its employees, releasing detailed records of Gambaryan’s detention on May 7. Teng warned that Nigeria’s actions set a dangerous precedent for global companies.
In addition, on March 13, 2024, the Nigerian government requested information on Binance’s top 100 users in Nigeria, alleging that unidentified individuals conducted around $26 billion in transactions on the platform, which purportedly contributed to the decline of the naira.
Lastly, despite the ban, Nigerians may still be able to trade using the U.S. dollar on P2P platforms. Some industry advocates argued that banning P2P transactions altogether is challenging and potentially impossible.