Regulatory Crackdown on Cryptocurrency Platforms in Nigeria
As a crypto enthusiast, you may have heard about the recent regulatory actions taken by the Central Bank of Nigeria (CBN) against leading global cryptocurrency platforms. The CBN has directed financial institutions to closely monitor and report on activities involving Bybit, KuCoin, OKX, and Binance. This move is part of an escalating effort to regulate the burgeoning cryptocurrency market in Nigeria.
CBN’s Mandate to Financial Institutions
- Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), and Other Financial Institutions (OFIs) must flag and restrict accounts suspected of engaging in cryptocurrency transactions.
- The CBN instructs implementing a post-no-debit (PND) order for six months on relevant accounts with heavy sanctions for non-compliance.
- The directive warns about arresting individuals or suspected agents involved in clandestine trading or facilitating the sale of USDT.
Local Cryptocurrency Exchanges Spared
- Despite the broad sweep of the directive, indigenous crypto exchanges in Nigeria seem to have been spared in the recent circular.
- Crypto companies such as Flincap have been proactive in obtaining necessary operational licenses, attributing their omission from the directive to compliance efforts.
Nigeria’s Allegations Against Binance
In addition to the regulatory actions against cryptocurrency platforms, Binance, a leading exchange, is under fire in Nigeria over allegations of tax evasion by the Federal Inland Revenue Service (FIRS). The legal challenge against Binance for omissions in VAT and Company Income Tax adds to the crypto giant’s global regulatory pressures. The Nigerian government has also detained two senior Binance executives, prompting concerns of a potential diplomatic situation due to their international links.
Global Trend of Tighter Regulations
- The recent actions by Nigerian authorities reflect a broader financial reform agenda aimed at stabilizing the Naira and curbing crypto operations implicated in currency manipulation.
- These regulatory moves resonate with the global trend of tightening oversight and regulation in the digital currency space.
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