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Nigeria weighs suspension of $56.7bn crypto market amid regulatory concerns

Government Considers Temporary Halt in Peer-to-Peer Trading as SEC Meeting Looms

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Amidst mounting regulatory scrutiny and growing apprehension over illicit activities, Nigeria contemplates suspending its $56.7 billion peer-to-peer cryptocurrency market following a pivotal meeting between the Securities and Exchange Commission (SEC) and digital asset operators set for Monday.

The nation’s crypto landscape has witnessed a significant surge in transactions, with volumes soaring by nine percent year-over-year to $56.7 billion between July 2022 and June 2023, as per the 2023 Geography of Cryptocurrency Report by Chainalysis.

The impending meeting with the SEC underscores the government’s broader effort to tighten oversight within the crypto sphere, aligning with recent regulatory actions such as the Central Bank of Nigeria’s halt on major fintech firms from onboarding new customers.

However, the proposal to block accounts engaging in cryptocurrency trading has sparked backlash, particularly from the 33.4 million active crypto traders who depend on such transactions for livelihood.

While uncertainties loom over the exact outcome of Monday’s meeting, stakeholders anticipate discussions on a comprehensive regulatory framework to govern the crypto space effectively. The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) confirmed the meeting’s agenda, emphasizing collaboration to ensure compliance and mitigate concerns regarding market manipulation and financial crimes.

Despite the potential suspension looming, stakeholders remain optimistic about finding common ground with regulators. Nonetheless, challenges persist, including the need for robust Know Your Customer (KYC) compliance measures to curb financial crimes, which have seen a surge in fraud losses in recent years.

As Nigeria navigates the complexities of regulating its burgeoning crypto market, Monday’s meeting holds immense significance in shaping the future trajectory of digital asset operations and regulatory oversight within the country.

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