Binance has opted to halt Naira trading on its peer-to-peer platform amidst recent regulatory actions. This decision follows the detention of Binance executives in Nigeria, who had journeyed there to address the country’s ban on cryptocurrency exchange platforms.
Nigeria boasts the world’s highest peer-to-peer trading volume, reflecting its significant crypto adoption. Concerns over Binance’s impact on Nigeria’s foreign exchange dynamics have led to increased regulatory scrutiny.
Recent measures by the Nigerian government include restricting access to online platforms of several crypto firms, including Binance. Authorities aim to curb perceived market manipulation and illicit fund movements.
However, it’s essential to recognize that exchange rates in peer-to-peer markets are determined by individual agreements and not controlled by crypto exchanges. These rates, often termed “open-market exchange rates,” fluctuate based on market conditions and tend to surpass interbank rates.
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This marks the first instance of a government attributing open-market currency rates to crypto exchanges.
The Nigerian Securities and Exchange Commission had previously declared Binance’s operations illegal in 2023, citing lack of registration.
Olayemi Cardoso, Nigeria’s Central Bank governor, alleged that Binance Nigeria facilitated $26 billion in transfers from undisclosed sources last year. Emphasizing ongoing efforts to address foreign exchange rate distortions, Cardoso underscored collaboration among federal agencies.
He stated, “The authority is determined to take control of our market and prevent external manipulation that undermines fair outcomes for all Nigerians.”
