Nigeria has taken a significant step in its ongoing efforts to regulate cryptocurrency activities within its borders. The country has directed telecommunications companies to restrict access to major crypto exchange websites, including Binance, Coinbase, and OctaFX. This move is part of a broader strategy to curb financial crimes and control the speculative activities surrounding cryptocurrencies.
Background and Context
Nigeria has long been considered one of the most crypto-savvy nations globally, even surpassing the United States and European countries in terms of cryptocurrency adoption, according to data from ConsenSys last year. However, the Nigerian government has recently intensified its regulatory measures to mitigate financial crimes associated with crypto transactions.
Earlier this year, the Central Bank of Nigeria (CBN) lifted its ban on crypto transactions, allowing lenders to open accounts for crypto firms. This marked a significant reversal of the ban imposed in 2021. Notably, in 2021, the CBN became one of the first central banks to issue a central bank digital asset (CBDC).
The New Directive
The latest directive to restrict access to crypto websites aims to slow down crypto speculation activities in the country. This decision comes just a few months after the CBN lifted its ban on crypto transactions. The restriction has already led to complaints from users who are unable to access these platforms.
One user posted on X (formerly Twitter), stating, "Binance doesn’t work in Nigeria anymore; you just can’t open the app. I believe we know our alternative."
Binance’s Response
In response to the restrictions, Binance has initiated efforts to ensure regulatory compliance. The exchange has released statements emphasizing its commitment to regulatory compliance and user protection. Binance has implemented stringent measures to protect users in the market, including:
- Real-time monitoring
- Immediate removal of non-compliant advertisements
- Permanent removal of bad actors from using their P2P product
Government’s Stance
The Special Adviser to Nigerian President Bola Tinubu on Information and Strategy, Mr. Bayo Onanuga, has accused crypto exchanges of manipulating the naira, contributing to its continued decline in the forex market. He has urged the Economic and Financial Crimes Commission (EFCC) and the CBN to take swift action against these exchanges.
In a detailed post on X, he noted that Binance, which is facing regulatory challenges in many countries, should not be allowed to influence the value of the naira.
Conclusion
Nigeria’s latest move to restrict access to major crypto exchange websites marks a significant step in its ongoing efforts to regulate the cryptocurrency market. While the directive aims to curb financial crimes and control speculative activities, it has also led to dissatisfaction among crypto users in the country. As the situation unfolds, it remains to be seen how these measures will impact the broader crypto landscape in Nigeria.
