Cryptocurrency News

Central Bank Of Nigeria Missed A Blind Spot When It Announced Ban On Cryptocurrency Derivatives In Feb

It’s no secret that governments all over the world may not exactly be supportive of cryptocurrencies. This is due to a number of reasons, chief among which being that the authorities would ideally like to administer a tax when it comes to crypto as well as increased regulations. Regardless, although there have been numerous attempts to stop individuals from becoming involved with crypto, people have shown that when push comes to shove, investors will find a way, and Nigerian crypto enthusiasts tend to subscribe to this line of thinking too.

Back in February, the country’s CBN (Central Bank of Nigeria) had ordered all of the financial institutions and organizations to stop providing services to any entities which may be involved with crypto. Shortly after this announcement, several centralized exchanges no longer had banking support which had resulted in the reserves decreasing. Furthermore, there was a decline in the customers’ ability to freely withdraw as well.

What actually happened

Although the CBN had actively tried to discourage citizens from becoming involved with crypto in any capacity via the aforementioned measure, there would seem to have been an unforeseen effect too. The co-founder and CEO of Naijacrypto, Chiagozie Iwu, recently offered his opinion on the matter. He said that all the government has actually succeeded in is causing most if not all of the crypto trading activities to be moved from the well-known centralized exchanges to the black market. Nigeria has been known for the overwhelming number of scams that take place there, and so the government may have just made things worse.

Still, many investors maintain the usage of P2P exchanges such as Binance and Paxful, with both of these platforms experiencing an exponential increase in growth shortly after the abovementioned directive had been administered.

How to stop the scams from happening

It goes without saying that scams and other related fraudulent activities are a global problem that must be solved. As such, although there is no guaranteed method of permanently eliminating scammers, working alongside the cryptocurrency sector and community can help and may even make the job of the regulators a little easier.

Chiagozie had stated that it would be wise for the government to work with Naijacrypto and other centralized exchanges as these CEXs often possess tools that can be utilized to track dangerous transactions and even blacklisted wallets, in addition to the platforms usually having KYC protocols put in place too for added security.

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