Binance, the cryptocurrency trading platform, has made the decision to remove the Nigerian currency, the naira, from its peer-to-peer service, causing dissatisfaction among its users in Nigeria. This move comes as Nigerian authorities have accused Binance of contributing to the devaluation of the naira. Bayo Onanuga, a presidential adviser, went so far as to state that Binance could potentially harm the Nigerian economy if left unchecked, as it sets foreign exchange rates without any regulation.
The peer-to-peer feature, which allows users to trade without the involvement of a third party, gained popularity in Nigeria in 2021 after the government banned the thriving crypto industry during former President Muhammadu Buhari’s tenure. However, due to the rapid decline of the naira and the subsequent high inflation rate of 29.9%, the government turned its attention to cryptocurrency service providers, as these platforms had gained prominence in trading and establishing an informal value for the naira.
Crypto users in Nigeria have reported difficulties accessing various crypto exchange websites, including Binance and OctaFX. Binance, in response, placed a limit on the selling price of Tether (USDT) tokens on its P2P platform, which prevented traders from selling USDT above 1,802 naira per USDT. Despite speculations from the local crypto community, Binance clarified that this price limit was due to an automatic system pause, not an intentional action.
Binance is facing increased scrutiny in Nigeria as the Central Bank of Nigeria (CBN) expressed concerns about suspicious fund flows through Binance Nigeria in 2023. Olayemi Cardoso, the head of the CBN, revealed that $26 billion had passed through Nigeria via Binance in 2023 from unidentified sources and users. In addition, there are reports that two senior Binance officials have been detained by the National Security Adviser’s office in Abuja, as the Nigerian government aims to crack down on cryptocurrency exchanges to control speculation surrounding the naira.
Local crypto analysts have expressed disappointment with the government’s unfriendly stance towards cryptocurrencies in addressing the nation’s foreign exchange challenges. They believe that if the government continues to antagonize cryptocurrencies and neglect the manufacturing and exporting sectors, Nigeria’s financial problems will persist.
Cointelegraph has reached out to Binance for a comment on the matter.