Naira is no longer one of the supported national currencies on Binance’s peer-to-peer network. Yesterday, officials in Nigeria arrested executives from Binance and confiscated their passports. The purpose of the Binance workers’ trip to Nigeria was to address the nation’s prohibition on cryptocurrency trading websites.
Nigeria leads the globe in peer-to-peer volume because of the country’s strong adoption rate. The announcement coincides with growing regulatory worries over Binance’s involvement in Nigeria’s foreign exchange problems.
The Nigerian government imposed restrictions on access to the websites of many cryptocurrency companies, including Binance, last week. The officials contended that doing this would stop what they saw as continuous money laundering and manipulation of the foreign currency market.
However, as is well known in the crypto industry, the exchange rates on P2P markets are not controlled by crypto exchanges — rather, the rate is the price at which two individuals agree to trade their assets.
The “open-market exchange rate,” as it is often called, is determined by people participating in P2P markets involving unstable fiat currencies. The exchange rates often fluctuate heavily depending on market conditions and are usually above the interbank rate.
This is the first time a government has blamed crypto exchanges for the open market rates of their currency.
It’s worth noting that the Nigerian Securities and Exchange Commission (SEC) declared Binance’s operations illegal in 2023, citing its lack of registration in the country.
Olayemi Cardoso, the governor of Nigeria’s Central Bank, recently told local media that Binance Nigeria allegedly facilitated the transfer of $26 billion from unidentified sources last year.
Cardoso said, “In the case of Binance, in the last one year, 26 billion dollars has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
Local media reported that Cardoso also reiterated the ongoing clampdown on crypto platforms and revealed the collaboration between federal agencies to curb the foreign exchange rate distortions.
He said the authority is determined to do everything it takes to ensure that we take charge of our market or put it differently to not allow others to manipulate our markets in a way that ends us distortionary and sub-optimises for all Nigerians.
