Nigeria to Ban Person-to-Person Crypto Trade in Battered Naira

Emele Onu, Bloomberg News

A customer counts out payment from a bundle of Naira banknotes inside a market in Lagos, Nigeria. Photographer: Damilola Onafuwa/Bloomberg , Bloomberg

(Bloomberg) -- Nigeria vowed to ban person-to-person cryptocurrency trading in the naira, taking its latest step to corral an industry which the West African nation blames for harming the battered local currency.

Securities and Exchange Commission Director General Emomotimi Agama also told a meeting with fintech professionals on Monday that new rules would be rolled out “in the coming days” covering crypto exchanges, digital asset custodians and other corners of the sector.

“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. “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 in a statement released by the Abuja-based SEC on Monday evening.

Peer-to-peer platforms allow crypto investors to trade directly with one another, rather than via a central intermediary. In such transactions, the traders themselves negotiate the price.

The warning follows Nigeria’s ban on Binance Holdings Ltd., the world’s largest cryptocurrency exchange, and the arrest of two of its executives when they visited the country in February.

One of them fled but the other, Tigran Gambaryan, has been jailed at the Kuje correctional center in Abuja and will go on trial this month where he faces charges of tax evasion, currency speculation and money laundering.

“Manipulations and all forms of activities that undermine our national interest would not be acceptable,” Agama said.

Africa’s most populous nation has seen residents flock into crypto assets as a hedge for weakness in the naira, which has lost 65% of its value against the dollar since the government eased currency rules in June to make the unit more attractive to foreign investors.

Central bank Governor Olayemi Cardoso in February accused Binance of allowing illicit transactions in the naira on its platform, which the authorities subsequently blocked.

“SEC will not hesitate to utilize all the powers within its mandate to handle issues that are negative and pose a threat to national interest,” Agama said. “We ask that those involved in sharp practices that undermine national interest should cease and desist.”

--With assistance from Philip Lagerkranser.

(Adds details on peer-to-peer trading in fourth paragraph.)