Nigeria’s fiat currency, the naira, has recently experienced a 15% drop against the US dollar, causing concern among crypto investors in the country. This is not the first time this has happened – the last time the naira plummeted, Nigerian officials banned Binance and arrested two of its executives on charges of money laundering and tax evasion. Now, with the naira at its lowest level ever in the foreign exchange market, the Central Bank of Nigeria’s efforts to prop it up seem to have been in vain.
In the midst of this, Nigerian officials are once again pointing the finger at peer-to-peer crypto trading as the cause of the naira’s fall, despite Binance’s forced exit from the market. The country’s Economic and Financial Crimes Commission (EFCC) has claimed to have uncovered an even bigger foreign exchange racket than Binance, and has obtained a court order to freeze 300 accounts allegedly involved in $15 billion worth of P2P transactions.
For Nigerian crypto investors, this situation is all too familiar, as pro-government figures have already launched online campaigns against exchanges like KuCoin, ByBit, and OKX. However, the Central Bank of Nigeria has debunked a fake directive circulating online that purports to order commercial lenders to freeze accounts of crypto traders and arrest those involved in P2P trading.
Despite these concerns, Rume Ophi, executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria, believes a crypto ban is unlikely. He points to the government’s campaign promise to use crypto and blockchain technology to improve the country’s financial sector, and suggests that following South Africa’s lead in creating a favorable regulatory landscape for crypto exchanges would be a better approach.
Meanwhile, some bad actors are taking advantage of the situation by publishing bogus quotes on platforms like KuCoin, ByBit, and OKX. One anonymous crypto trader warns that if the government does decide to ban crypto, they will only have themselves to blame for participating in such activities.
It remains to be seen how Nigerian officials will handle the situation, but for now, the crypto community in the country is holding their breath. Our DeFi correspondent, Osato Avan-Nomayo, will continue to report on developments in Nigeria’s crypto landscape.
