Amid heightened regulatory scrutiny, Binance, a leading cryptocurrency exchange, has taken the decision to remove support for the Nigerian Naira on its platform. This move comes amidst concerns raised by Nigerian authorities regarding Binance’s role in the country’s foreign exchange dynamics. The decision underscores the challenges faced by crypto exchanges in navigating regulatory landscapes while maintaining operational integrity.
Binance Executives Detained, Passport Seized
Reports indicate that Nigeria’s fiat currency, the Naira, has been removed from the list of supported national currencies on Binance’s peer-to-peer platform, as per sources from CryptoSlate. USAfrica also reported earlier that two executives from Binance were detained in Nigeria, with their passports confiscated. These executives had traveled to Nigeria in an attempt to address the country’s ban on crypto exchange websites.
Regulatory Concerns and P2P Exchange Rate Dynamics
Nigeria, boasting the highest peer-to-peer volume globally, faces mounting regulatory concerns regarding Binance’s role in the country’s foreign exchange challenges. Last week, the Nigerian government restricted access to online platforms of various crypto firms, including Binance, citing concerns over market manipulation and unlawful fund movement. However, it’s important to note that exchange rates on peer-to-peer markets are determined by individual traders, not crypto exchanges themselves. The “open-market exchange rate,” influenced by market conditions, often fluctuates significantly and is typically above the interbank rate.
This marks the first instance of a government attributing crypto exchanges to open market currency rates.
SEC Declared Operations Illegal
The Nigerian Securities and Exchange Commission (SEC) declared Binance’s operations illegal in 2023, citing lack of registration in the country.
Unverified Transaction and Regulatory Determination
Governor Olayemi Cardoso of Nigeria’s Central Bank recently alleged that Binance Nigeria facilitated a $26 billion transfer from unidentified sources last year. Cardoso emphasized the authorities’ determination to curb foreign exchange rate distortions and clamp down on crypto platforms.
Nigerians Remain Pro-Crypto Despite Regulatory Landscape
Despite the government’s stance, Nigeria’s tech-savvy population maintains a strong interest in cryptocurrencies. Tech entrepreneur Victor Asemota highlighted the nation’s reliance on cryptocurrencies for cross-border transactions, urging the government to provide alternative, efficient channels rather than attempting to stifle crypto usage.
