In response to heightened scrutiny from the Central Bank of Nigeria (CBN), several crypto companies in Nigeria have decided to suspend the buying and selling of USDT (Tether) and USDC (USD Coin) with Naira.
A closed-door meeting of crypto founders took place on Tuesday morning, resulting in a collective decision to temporarily halt the trading of USDT and USDC on their platforms. While specific details of the meeting remain confidential, it underscores the growing concern within the crypto industry about regulatory pressure.
Nigerian regulators have recently intensified their focus on crypto exchanges, alleging that these platforms enable speculative trading and may contribute to exchange rate manipulation. This week, users encountered difficulties accessing the websites of popular exchanges such as Coinbase, Quidax, and Binance.
The increased volatility in Nigeria’s foreign exchange (FX) markets prompted the CBN to take action. Olayemi Cardoso, the Central Bank governor, revealed that an estimated “$26 billion has passed through Binance Nigeria from sources and users we cannot identify.” The lack of transparency and potential risks associated with crypto trading have raised alarm bells within the regulatory community.
The Digital Currency Coalition, an autonomous group, asserts that speculative trading on crypto platforms significantly contributed to the “113.1% devaluation of the naira against USDT” since February 2023. This depreciation has further fueled concerns about the stability of the national currency.
Unconfirmed reports suggest that two executives at a crypto company were arrested on Tuesday. The move is believed to be an attempt to compel the company to share its Know Your Customer (KYC) data. However, Zakari Mijinyawa, a special adviser to Nigeria’s National Security Adviser, Malam Nuhu Ribadu, remains unaware of any arrests and speculates that law enforcement agencies may be involved.
Crypto exchanges in Nigeria are now treading cautiously, emphasizing the need for compliance with regulations while navigating the evolving landscape.
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