In a new development that has grabbed considerable attention, the International Monetary Fund (IMF), a United Nations financial agency, has urged the Nigerian government to regulate and issue licenses to foreign crypto exchanges.
According to the IMF, imposing mandatory registration and license procurement for every crypto platform before obtaining operational access in Nigeria will be crucial in helping the West African nation secure financial stability.
Read Also: Nigerian SEC Seeks Stricter Crypto Regulation, Deletes P2P On Platforms
The report read in part, “Authorities should ensure the application of AML/CFT [Anti-Money Laundering and Countering the Financing of Terrorism] controls by crypto trading platforms and other virtual asset service providers through effective AML/CFT risk-based supervision.“
The financial agency highlighted the new recommendations in IMF’s 2024 Article IV consultation with Nigeria, and it came at a period characterized by Nigerian currency gross devaluation.
Aside from suggesting possible methods of enacting crypto regulatory compliance, the IMF also commended the Nigerian regulatory bodies’ handling of crypto-related cases, evident in the ongoing legal dispute between the Nigerian government and the world’s largest exchange, Binance.
Earlier this year, particularly in February, the Central Bank of Nigeria (CBN) raised an alarm about significant untraceable transactions occurring via crypto exchanges and contributing significantly to the instability associated with Nigeria’s Naira currency.
The CBN spotlighted Binance Nigeria as a notable facilitator of the hideous transactions, stating that the trading platform had processed and finalized transactions estimated to be worth about $26 billion.
Consequently, the Nigerian authorities charged Binance to court on counts of financial crime offenses ranging from money laundering, tax evasion, aiding customers to evade tax, etc. How events unfold for both parties remains uncertain. However, a potential settlement between both parties could take a long time, which does not depict a favorable outcome for either entity.
Read Also: Binance To End All Naira (NGN)-Related Services. What Nigerian Users Must Do
In addition, the CBN ordered fintech firms operating within the Nigerian axis to block accounts of customers running crypto transactions, adding that defaulters should be reported to the appropriate law enforcement agents for follow-up, which depicts the possibility of strict punishment measures for offenders.
Meanwhile, the Nigerian Securities and Exchange Commission (SEC) has moved to ban peer-to-peer (P2P) cryptocurrency transactions with Naira. The Nigerian SEC Director, General Emomotimi Agama, while speaking about delisting the Naira from P2P, noted that it would be crucial in protecting the Nigerian currency from manipulation that has seen it drastically lose value.
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