Nigeria CBN warned that traders "buying and selling USDT illegally" would be arrested.

Amid a trending circular on social media platform X, Nigerian authorities are reportedly preparing for the next phase of their crackdown on cryptocurrency trading, with a specific focus on peer-to-peer (P2P) platforms such as OKX, Binance, KuCoin, and Bybit.

However, the Central Bank of Nigeria (CBN) has disclaimed the information contained in the circular, emphasizing that it did not originate from the bank.

According to the circulated memo, the CBN purportedly directed financial institutions in the country to identify individuals or entities engaged in transactions with these unlicensed exchanges and impose a six-month Post No Debit (PND) instruction on their accounts. The bank stated that these platforms are not authorized to operate in Nigeria and are currently under investigation, warning of severe regulatory sanctions for non-compliance with the directive. Additionally, the CBN cautioned against any illegal trading of USDT (Tether) and threatened arrests for offenders.

Olumide Adesina, a business journalist, clarified that the CBN's official position is that only entities regulated by the Nigerian Securities and Exchange Commission (SEC) in the crypto market can conduct business with banks.

In a recent press briefing, Ola Olukayode, chairman of the Economic and Financial Crimes Commission (EFFC), highlighted the exacerbating effect of transactions on P2P platforms like KuCoin on the country's foreign exchange challenges. The anti-graft agency reportedly froze approximately 300 suspected illegal forex accounts associated with P2P trading platforms, with over $15 billion passing through one platform in the last year alone.

This crackdown aligns with the Nigerian government's efforts to address foreign exchange market instability. Initially, authorities attributed the weakening of the Nigerian Naira against the US Dollar to speculative activities on Binance, a crypto exchange. While Binance has denied these allegations, it is currently undergoing trial, along with two executives, on charges of tax evasion and money laundering. Binance has asserted its cooperation with authorities and called for the release of its detained employees.