Concerns have been expressed about the future of cryptocurrencies in Nigeria following Nigeria’s ban on Binance.
The worries come after two weeks of government actions aimed at the cryptocurrency platform. Nigeria requested last week that its telecommunications companies limit users’ access to cryptocurrency company websites.
After that, it requested that Binance and other parties stop USDT trades in naira. Nigerians are currently unable to access the Binance Peer-To-Peer (P2P) market. The news that the two executives of the company had been taken into custody surfaced on Wednesday.
Following Nigeria’s recent ban on a number of bitcoin trading websites, the two executives took a plane to the country, whereupon the national security adviser’s office apprehended them and confiscated their passports.
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, disclosed earlier on Tuesday that $26 billion came through Binance Nigeria in a single year from users and sources that the central bank was unable to identify.
He verified that many authorities, such as the Office of the National Security Adviser (ONSA), the Police, and the Economic and Financial Crimes Commission (EFCC), are working together to crack down on economic saboteurs.
“We are resolved to take control of our market and prevent manipulation by others. We will not tolerate it and will take all appropriate measures to stop any violations,” he said.
Reactions to Cardoso’s remarks and the nation’s actions have been conflicting, with trade volumes declining as fear engulfed the cryptocurrency sector.
An unnamed industry expert stated: “We’re not sure if the government is targeting the industry as a whole or just Binance. They have not yet made a statement.”
Industry insiders who talked to BusinessDay claimed they were forced to replay the misery of 2021, the year the nation outlawed cryptocurrency transactions for the first time.
“People trade less now than they did in the past. The majority of platforms have also made it impossible to trade USDT and naira. Just as it did in 2021, it is having an impact on the entire industry. We would like to know if the government opposes cryptocurrency or Binance. because it’s not what they’ve stated. P2P on Binance is down. They are currently showing “pepper” to us,” a cryptocurrency dealer going by the name Korede claimed.
Sources acquainted with the situation indicated that, in contrast to 2021, when the CBN spearheaded the crackdown on cryptocurrencies, the current action is more of an ONSA-led inquiry. “The CBN isn’t battling Binance. “The problem is with the ONSA and Binance,” according to one insider.
The cryptocurrency company had previously declared that it was eager to cooperate with Nigerian lawmakers and regulators. “We continue to actively engage with regulators, policymakers, and other relevant stakeholders to foster an open, transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.”
The creator and coordinator of the Blockchain Nigeria User Group, Chimezie Chuta, told BusinessDay that Binance has been discovered to have participated in a few transactions that have prompted the government to take notice of potential threats to national security.
“The average crypto trader was not at risk,” he declared.
Nigeria reportedly wants Binance to release a list of all of its Nigerian users since it started doing business there. Additional sources attest that the crackdown on Binance may have something to do with users using the site to finance illegal activities and launder money.
According to sources, the Nigerian Financial Intelligence Unit conducted a research and accused cryptocurrency sites as instruments for financing terrorism and other illegal acts. This led to the most recent crackdown on these platforms.
Many investigations into Binance have been conducted worldwide. It admitted admission to criminal accusations of money laundering and breaking international sanctions regulations, and in November it paid $4.3 billion in fines to US authorities.
According to recent disclosures from Chainalysis, the global criminal crypto activities were valued at $24.2 billion in 2023. Online cryptocurrency platforms are being used more frequently for illegal activities, including money laundering, according to the blockchain company. It was discovered that $22.2 billion in cryptocurrency was laundered last year.
One of the biggest peer-to-peer cryptocurrency markets globally, Nigeria saw $56.7 billion in cryptocurrency transactions between July 2022 and June 2023, according to Chainalysis.
Legal prohibitions on digital assets in nations like Nigeria have contributed to the rise in P2P transactions. Binance recorded a 2,228.21 percent rise in P2P users on its platform and a 386.93 percent increase in P2P volumes across Africa following Nigeria’s February ban on cryptocurrency transactions.
Even if the cryptocurrency market’s future is uncertain, a lot of traders are already looking at using other platforms, like Telegram, to carry on their P2P transactions.
