Binance Under Fire in Nigeria as Presidential Adviser Urges Ban

The call for a ban on Binance, KuCoin, and other trading platforms in Nigeria has intensified as Bayo Onanuga, an adviser to President Bola Tinubu, alleges manipulation of the country’s fiat currency, the Nigerian naira, by these platforms.

Onanuga took to X to urge the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to halt cryptocurrency exchanges’ operations, citing concerns about the ongoing decline of the naira in the forex market.

The Naira-Dollar manipulators

I chanced on an X post Tuesday night by one Brother Bernard @Mikael C Bernard who railed against what he called the order of the EFCC, NSA on Finance to set a cap on traders selling USD tokens for Naira equivalent.

He disclosed that token sellers… pic.twitter.com/c9YBjawJMz

— Bayo Onanuga (@aonanuga1956) February 21, 2024

There has been a steady decline in the value of the naira which has seen it trade at 1,900 naira per dollar, in unofficial markets, as against around 700 naira to the dollar in early 2023.

Is Binance Behind Nigeria’s Forex Crisis?

In a post titled “The Naira-Dollar Manipulators,” Onanuga accused Nigerians of being unpatriotic when trading on Binance and other platforms. He called for the swift intervention of regulatory authorities to prevent further depreciation of the national currency.

This call is reminiscent of the ban on crypto trading in 2021 by the immediate past administration until it was lifted last year. Analysts however believe the presidential adviser was just throwing blame at cypto users to save face as his boss grapples with economic challenges facing the country.

Binance Responds

Meanwhile, Binance has clarified that the price peg was a result of an automatic system pause and not indicative of any regulatory action. Binance, which is under regulatory scrutiny in several countries, has distanced itself from the forex crisis in Nigeria, stating that its platform operates on market-driven principles and does not influence currency pricing in the country.

However, amid reports of difficulty accessing crypto exchange websites in Nigeria, Binance assured users that it is actively engaging with regulators to address concerns and foster transparent dialogue about cryptocurrency regulation.

The situation escalated when Binance set a limit on the selling price of Tether (USDT) tokens on its peer-to-peer (P2P) platform, restricting traders from selling USDT above a certain price. This sparked speculation among some members of the local Binance community discussing possible alternatives on X, which Onanuga pounced on to call for the ban.

Nigeria, Largest African P2P Crypto Market

Nigeria has emerged as the largest P2P crypto market globally, following the CBN’s ban on institutions from buying and selling crypto in 2021. However, a recent circular issued to banks in December 2023 lifted the ban. As the debate over cryptocurrency regulation continues in Nigeria, the government faces pressure to address concerns about currency manipulation while ensuring a conducive environment for crypto traders and investors.