By Adedapo Adesanya
The International Monetary Fund (IMF) has advised the Nigerian government to register or issue operating licences to crypto trading platforms amid its ongoing fracas with the largest cryptocurrency platform, Binance.
This recommendation was made in the IMF’s latest staff report following the conclusion of its 2024 Article IV consultation with Nigeria.
According to the report seen by Business Post, the IMF said compelling global crypto trading platforms to register will subject them to regulatory requirements.
The Nigerian government has closed the operations of Binance and other crypto-asset trading platforms that were being allegedly used by Nigerians to facilitate capital flight to which neither the identity of traders nor the origin of their funds could be traced.
The lender added that the authorities also revoked the licenses of 4,173 BDCs that failed to comply with CBN accounting and reporting requirements.
To this, “[IMF] recommends that global crypto trading platforms be registered or licensed in Nigeria and subject to the same regulatory requirements applicable to financial intermediaries following the principle of the same activity, same risk, and same regulation. Moreover, the authorities should ensure the application of AML/CFT preventive controls by crypto trading platforms.”
The IMF emphasised the need for Nigeria to establish a robust regulatory framework to oversee the growing cryptocurrency market, ensuring financial stability and protecting investors, noting that this aligns with global efforts to standardise cryptocurrency regulations and prevent illicit activities.
The IMF also noted that Nigerian authorities took significant steps early in the year to address issues surrounding cryptocurrency trading platforms.
The report read, “The authorities agreed with the importance of maintaining external stability and emphasized that the reforms that they have implemented as well as efforts to bring in FX liquidity, including the requirement for international oil companies to hold 50 per cent of repatriated oil receipts in Nigeria for 90 days, are geared towards that end.
“They see pressure on the exchange rate now coming from illicit flows, including through crypto-asset platforms, and not being driven by fundamentals, noting that some ceilings on FX access are intended to curb abuse.”
In February, the Governor of the Central Bank of Nigeria, Mr Yemi Cardoso, expressed concerns about the large volume of transactions passing through crypto exchange platforms from unidentified sources, stating that it is working with other government agencies to address these illicit financial activities. The bank claimed that in the last year, $26 billion passed through Binance Nigeria from unidentified sources.
That comment has since created a ripple effect that has seen cryptocurrency trading platforms come under scrutiny on the suspicion that they were manipulating the local currency’s value in the foreign exchange market.
Earlier this week, the acting Director-General of the Securities and Exchange Commission (SEC), Mr Emomotimi Agama, said delisting the Naira from Peer-to-Peer (P2P) platforms was necessary to save the local currency.
Fintech companies operating in the country including OPay, MoniePoint, PalmPay, and others have been advised to block the accounts of customers engaging in cryptocurrency transactions and to report those transactions to law enforcement agencies.
Also, the Economic and Financial Crimes Commission (EFCC) has intensified clampdown on street traders.
