Nigerians fear new crypto crackdown as currency drops 15% and officials blame more than Binance

Nigeria’s crypto investors are feeling a sense of déjà vu.

And it’s not good.

The country’s fiat currency, the naira, has lost 15% of its value against the US dollar in the last seven days.

The last time this happened, Nigeria’s government banned Binance, arrested two of its executives, and charged them with money laundering and tax evasion.

Lowest level

That drop has arrested a month-long effort by the Central Bank of Nigeria to prop up the naira’s value after it sunk to its lowest-ever level in the foreign exchange market.

Once again, the authorities are blaming crypto peer-to-peer trading for the fall despite Binance’s forced exit from the market last month, according to Nigerian officials close to the situation.

Nigeria’s Economic and Financial Crimes Commission, the country’s anti-corruption police, said it has discovered alleged foreign exchange racketeering that is “worse than Binance.”

Court order

“They call them P2P and all of that [and] we noticed in the last two days that dollars have started appreciating,” EFCC chairman Ola Olukoyede said in a meeting on Tuesday monitored by DL News.

“It was due to the activities of some of these guys on P2P platforms like ‘coolcoin,’” Olukoyede said.

It is likely Olukoyede is referring to the centralised crypto exchange platform KuCoin.

‘That is crazy and when the government swings the ban hammer, we’ll only have ourselves to blame.’

Anonymous crypto trader

The EFCC’s top cop said the commission obtained a court order on Monday to freeze 300 of such accounts. One trader allegedly facilitated $15 billion in P2P transactions last year, the EFCC said.

For Nigerian crypto investors, the situation feels eerily familiar as pro-government figures have already launched online campaigns against exchanges like KuCoin, ByBit, and OKX.

Nigeria’s central bank, on Wednesday, debunked a fake directive purporting to direct commercial lenders to freeze accounts of crypto traders.

The bogus document also called on law enforcement agencies to arrest persons involved in crypto peer-to-peer trading.

Platforms like KuCoin, ByBit, and OKX have become the alternative for Nigerians to trade the naira for Tether’s USDT.

Some bad actors are already publishing bogus quotes on those platforms, said one crypto trader who spoke to DL News on the condition of anonymity.

“Some of my colleagues are quoting 2,000 NGN per dollar,” he said. “That is crazy and when the government swings the ban hammer, we’ll only have ourselves to blame.”

No crypto ban

Rume Ophi, executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria, said a crypto ban is highly unlikely.

“I don’t see a crypto ban on the horizon because this government campaigned on the promise of using crypto and blockchain technology to improve our financial sector,” Ophi told DL News on Wednesday.

Ophi advised Nigeria’s government to follow in South Africa’s footsteps by creating a favourable regulatory landscape for crypto exchanges.

South African regulators licensed 60 crypto platforms earlier this month in a landmark for crypto regulations in Africa.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.