In response to heightened regulatory investigations by Nigerian authorities on cryptocurrency trading platforms, KuCoin, a global cryptocurrency exchange, has announced the temporary suspension of its peer-to-peer (P2P) services for Nigerian users, effective from May 15, 2024.
Naira’s value has been steadily dropping, and the government is pointing fingers at cryptocurrency as a culprit.
This has led to a tense challenge between crypto platforms and Nigerian authorities, with the former leaving the Nigerian market altogether.
The Nigerian Securities and Exchange Commission (SEC) recently met with major crypto players, urging them to stop peer-to-peer (P2P) trading using the naira. The SEC blames P2P activity for manipulating the naira and contributing to its depreciation.
Following these warnings, KuCoin, the latest to exit, has joined OKX and Binance, which left the Nigerian market after a public dispute with the government.
The office of the National Security Adviser has heightened investigations of P2P trading, with regulatory bodies like the Economic and Financial Crimes Commission (EFCC), blocking thousands of accounts suspected of crypto activity.
Fintechs and banks have also been instructed to close accounts linked to crypto trading and report them to the authorities.
Emomotimi Agama, the Director-General of the Nigerian Securities and Exchange Commission (SEC), has spoken on concerns about the impact of P2P trading on the exchange rate of the Naira, linking it to the depreciation of the national currency.
Despite these regulatory measures, the depreciation of the Naira continues, with the USD reaching a record high exchange rate of ₦1520 as of May 14, reiterating the ongoing challenges in the country’s currency stability.
These measures are causing frustration among Nigeria’s young generation, a demographic heavily invested in cryptocurrency.
For many, crypto is an investment opportunity or even a source of income through remote work with foreign companies paid in stablecoins like USDT. P2P trading allows them to convert these stablecoins back to naira.
