Peer-to-peer trading on Binance, a popular cryptocurrency exchange with over 170 million users globally, was disabled for Nigerian customers.
The network, sometimes referred to as the P2P market, enables users, buyers, and sellers to deal without the involvement of a middleman. Following the administration of former President Buhari’s ban on the nation’s thriving cryptocurrency business, it became more and more popular among Nigerians in 2021.
After the naira quickly declined in value, leading to inflation that surged to an almost three-decade high of 29.9%, the FG turned its focus to websites that provided services related to cryptocurrencies. These websites are now a practical means of conducting business and determining the naira’s informal worth.
The Central Bank of Nigeria voiced concerns about the $26 billion that entered via Binance Nigeria from “unidentified sources” the year before.
According to CBN Chief Olayemi Cardoso, “in the case of Binance, $26 billion has passed through Binance Nigeria in the last year alone from sources and users who we cannot adequately identify.”
In order to combat such illicit financial operations, the chairman of CBN also recommended that the Securities and Exchange Commission (SEC), the Police, the Office of the National Security Adviser (NSA), and the Economic and Financial Crimes Commission (EFCC) collaborate.
The websites of cryptocurrency companies, including Binance, were recently taken down by the Federal government in an attempt to curb what it perceives as continuous manipulation of the foreign exchange market and illicit money transfers.
In an effort to curb naira speculation, Nigeria is cracking down on cryptocurrency exchanges, and two senior Binance officials have been arrested in the country.
The CEOs flew to Nigeria after the country’s decision last week to ban a number of bitcoin trading platforms. Nevertheless, they were detained and had their passports seized by the office of the national security adviser.
The Federal Government (FG) has requested that officials of the largest cryptocurrency exchange in the world who are presently detained provide details on any transactions performed on the Binance platform that have involved Nigerian Naira over the previous seven years. They also insisted that further data pertaining to Nigeria be taken down from the Binance website.
To detain the officials for a minimum of twelve days, the government first obtained a court warrant. The spokesperson for President Bola Onanuga stated at a press conference that Binance was “blatantly” setting the exchange rate and replacing the CBN as the organisation in charge of doing so.
The NCC ordered telecom providers to impose access restrictions on several of the largest bitcoin exchanges in the world, such as Binance, Coinbase, and Kraken.
Top state officials in Nigeria claim that cryptocurrency companies facilitate illicit activities by money launderers and currency speculators. Authorities believe that “criminal activities” occurring on the platforms are a significant contributing element to the naira’s collapse.
Nigeria continues to be the most developed country in the world and has the largest cryptocurrency usage in Africa, according to a Chainalysis analysis. The country’s yearly growth rate is 9%. Nigeria is now ranked third out of just six nations that have experienced steady development since 2021.
At 223 million, Nigeria has one of the fastest-growing populations in Africa and one of the youngest demographics in the world, with 43% of its present population under the age of 15. A younger, more tech-savvy populace along with falling smartphone prices are creating new opportunities for activities related to cryptocurrencies.
