On the 28th of February, the Nigerian crypto community was shocked by the news that Binance, the World’s leading cryptocurrency exchange was delisting the Naira Peer to Peer option on its platform.
This decision followed a spat between Binance Limited and Nigerian authorities with the latter accusing Binance of currency manipulation and Tax evasion.
This sad news added to the woes of the Nigerian crypto community which was already nursing the wounds of Paxful, another major crypto exchange with a significant Peer-to-peer market share in Nigeria closing down operations.
These two developments meant that the Nigerian crypto community has little to no trusted centralized exchange to rely on for safe and smooth P2p trade.
The P2P market in Nigeria is quite huge as many Nigerians who earn in dollars are in constant need to convert their USDT to Naira via trusted means.
The process can only be safe if there is a centralized exchange serving as a mediator or an escrow between the seller and the buyer to mitigate the risk of fraud and the menace of bad actors.
The closing down of Paxful and the delisting of P2P trading on Binance threw the Nigerian crypto community into the Wild Wild West of unregulated trades and unchecked actors.
The Current State of P2P in Nigeria
Regardless of the above developments, P2P trading is still fully active in the Nigerian crypto space.
Nigerian crypto enthusiasts now rely on direct P2P trade with WhatsApp and Telegram in the absence of any escrow or middleman.
Direct P2P trade is very risky and the menace of bad actors has tripled since the exit of Binance and Paxful from the Nigerian market.
Rume Ophi, a leading crypto analyst in the African space spoke to Nairametrics on the Cons of Direct P2P trade pointing out how the space badly needs regulation.
“Illicit transactions can be difficult to monitor and regulate with direct P2P”
Rume also pointed out the obvious risk of losing your crypto assets to scammers posing as merchants.
“Bad actors claiming to be trusted can go with your coins and you may not be able to get them in the short term, Blockchain investigation costs much someone duped might not be able to afford it.”, Rume added
Olayimika Oyebanji, an award-winning crypto journalist added to the conversation by telling Nairametrics the huge task involved in regulating Direct P2P in the absence of centralized exchanges.
“Regulating peer-to-peer transactions on Telegram and other social media platforms is a Herculean task today. Some have suggested that crypto traders should be allowed to register with the CAC like other businesses, which I subscribe to.”
”This measure will enable the government to regulate the activities of licensed crypto traders through taxation while cracking down on the criminals among them”, Oyebanji stated.
In the absence of the Binance crypto exchange, some viable alternatives still exist for crypto enthusiasts who don’t want to risk Direct P2P.
Exchanges like Local Traders offer safe P2P services for zero fees with up to 750 payment options including major Nigerian Banks.
Such options are viable for Nigerian P2P traders who want to continue P2P Trading but don’t want to risk Direct P2P on telegram or WhatsApp.
P2P trading is the backbone of the Nigerian crypto market and will always thrive regardless of existing policies and bottlenecks.
What to Know
- Many Nigerians anticipate the return of Binance P2P following the release of Tigran Gambaryan after a seven-month detention. The release marked a turn in the ongoing spat between Binance and Nigerian authorities.
- P2P stands for Peer to Peer and is a type of crypto transaction involving a crypto buyer and seller making a trade under the supervision of a centralized exchange or directly with social media apps.