Nigeria’s largest cryptocurrency exchange, Binance, has discontinued its peer-to-peer trading service for the Nigerian naira, triggering a wave of dissatisfaction among its Nigerian user base. The community voiced their grievances on a notable social media platform. This move comes against a backdrop of accusations by Nigerian officials suggesting that Binance’s operations are impacting the local currency’s value negatively.
Binance Faces Governmental Criticism
Presidential advisor Bayo Onanuga warns that Binance’s influence on exchange rates could have dire consequences for the Nigerian economy. The direct trading feature of P2P has gained traction in Nigeria since the government’s crypto crackdown in 2021 under former President Muhammadu Buhari’s regime.
Amidst a severe economic downturn marked by a record inflation rate of 29.9% and the naira’s rapid depreciation, the Nigerian government has shifted its focus to crypto service platforms. These sites have become infamous for setting an unofficial rate for the naira.
Nigerian crypto traders have recently faced challenges accessing exchanges, including Binance and OctaFX. Binance, reacting to the situation, implemented a cap on the USDT selling price on its P2P platform, limiting sales to no more than 1,802 naira per token.
Regulatory Pressures Intensify for Binance
Despite speculation from local crypto circles, Binance clarified that an automated system pause was responsible for the price cap. The Central Bank of Nigeria has flagged Binance for observing suspicious transactions, leading to heightened regulatory attention in 2023. The Governor of the Central Bank disclosed that approximately $26 billion in transactions processed through Binance in Nigeria lacked clear origins.
Additionally, reports indicate that two top Binance executives have been detained by the National Security Advisor’s office in Abuja as part of efforts to control cryptocurrency exchanges and stabilize the naira’s valuation. Cryptocurrency proponents in Nigeria criticize the government’s adverse stance on digital currencies, arguing that without a focus on production and export, financial woes will continue unabated.
