Local stakeholders in the cryptocurrency industry have expressed their concerns over the recent ban on Binance’s naira operations in Nigeria. They believe that this decision will have a negative impact on the livelihoods of many Nigerians and could contribute to an increase in youth unemployment.
In interviews with Cointelegraph, various local crypto stakeholders have stated that the removal of Nigerian naira-related services from Binance will pave the way for new crypto exchanges to emerge. These exchanges will fill the void left by Binance’s departure by adhering to local regulations.
Nathaniel Luz, the CEO of Flincap, a liquidity platform for crypto exchanges, revealed that numerous Nigerian traders who rely on peer-to-peer trading on Binance are now affected by this ban. However, Luz mentioned that some traders have resorted to trading on WhatsApp and Telegram groups.
Oladotun Wilfred Akangbe, the chief marketing officer of Flincap, emphasized that the ongoing uncertainty surrounding cryptocurrency regulation in Nigeria, coupled with the decision to halt Binance operations, can undermine people’s confidence in the industry. He further warned that this situation could lead to widespread fear, uncertainty, and doubt within Nigeria’s crypto space.
In an official statement on its website, Binance announced that it would automatically convert naira balances to Tether (USDT) starting from March 8 at 8:00 am UTC. Additionally, the platform would cease support for naira deposits from March 5 at 2:00 pm. Withdrawals have been disabled since March 8 at 6:00 am, and the conversion rate stands at 1 USDT for 1,515.13 naira. Binance’s peer-to-peer platform had already removed all naira trading pairs in late February.
The Central Bank of Nigeria’s governor raised concerns on February 27, accusing crypto exchanges in Nigeria of being involved in illicit transactions. He specifically pointed to “suspicious flows” of funds at Binance. As suspicions regarding Binance’s alleged illicit operations in Nigeria grew, the Nigerian House of Representatives Committee on Financial Crimes summoned Binance CEO Richard Teng to appear before the committee by March 4.
In 2023, Nigeria’s Securities and Exchange Commission stated that Binance Nigeria was not registered or regulated by the commission, making its operations in Nigeria illegal. However, in December 2023, the Central Bank of Nigeria reversed its stance on crypto assets and advised banks to disregard the previous ban on crypto transactions.
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