Cryptocurrency trading platform Binance has removed the Nigerian currency, the naira, from its peer-to-peer (P2P) service as the Nigerian government seeks $10 billion in compensation amid a crackdown on the crypto exchange.

In a BBC interview on March 1, Bayo Onanuga, President Bola Tinubu's special adviser, revealed the update about the compensation demand as part of efforts to stabilize the local currency. Onanuga said Binance would destroy the Nigerian economy if not stopped because it arbitrarily fixes foreign exchange rates.

The P2P feature allows users, buyers and sellers to trade without involving a third party. It became popular in Nigeria in 2021 following the government’s ban on its thriving crypto industry during former President Muhammadu Buhari’s administration.


Screenshot of a Binance user complaint on the X platform. Source: silasadedoyin
Due to the rapid decline of the naira and the resulting almost three-decade-high inflation rate of 29.9%, the government turned its focus to platforms providing cryptocurrency services. These websites have become famous for trading and establishing an informal value for the naira.

Crypto users in Nigeria had earlier reported difficulty accessing different crypto exchange websites, including Binance, OctaFX and others. A few days later, Binance set a limit on the selling price of Tether (USDT) tokens on its P2P platform, leaving traders unable to sell USDT above 1,802 naira per USDT.

However, contrary to speculation by the local crypto community, the exchange explained that the price peg was due to an automatic system pause.

Binance is under increased scrutiny in Nigeria as the Central Bank of Nigeria (CBN) expressed concerns about “suspicious flows” of funds through Binance Nigeria in 2023. CBN head Olayemi Cardoso highlighted that $26 billion had passed through Nigeria via Binance in 2023 from unidentified sources and users.

There are also reports that the National Security Adviser’s office has detained two senior Binance officials in Abuja as the nation looks to crack down on cryptocurrency exchanges to tame the speculation about the naira.

Local crypto analysts have expressed disappointment in the government’s unfriendly attitude toward crypto in resolving the nation’s foreign exchange challenge. A Nigerian crypto enthusiast said on X that the nation’s financial problems will persist if it continues antagonizing cryptocurrencies and failing to focus on manufacturing and exporting.

; over to wailing wailers sudden lovers of Nigeria, Niger republic, Binance , bachir Lawal and Enemies to formal friends like ReNo, FFK

While all these sudden policy seem to be frustrating Nigerian who have found survival route in cryptocurrency and a market in Binance, I'm sure the fight by the two elephants (FGN and Binance) won't kill the grass (Nigerian) we will survive. There are other emerging crypto exchanges that are better alternative or following after the right footsteps of Binance. Exchange such as Bitget. I've used their P2P option a couple of time and It goes well and fast. It might just be a good time for Nigerian P2P Merchant on Binance to diversify and become merchants on Bitget or other surviving exchange and we continue pushing as a people. I don't want to mention Mexc since I barely use them. Yeah. Nigerians need Binance but Binance too wouldn't want to leave the Nigerian market.

Although I read on gazettengr . com on Friday where Binance claim it was not in any talks with the Nigerian government about potentially paying up to $10 billion in fines, contradicting FGN spokesman’s statement to the BBC hours earlier. Let's just watch things play out. But find alternative and continue your crypto endeavors.

Will they not go after other exchanges still operating in Nigeria

Celestialsword:
Will they not go after other exchanges still operating in Nigeria

I don't think they would want to go that far. Note that most of them or their sons or relatives are also benefiting from Cryptocurrencies. However, I assume the Nigerian Govt. would want a share of the crypto money. They paid $4 billion fine in the United States. The point is, the presidency must adopt the art of compromise and negotiations in cases like this. Cos that's just how they can benefit from this situation.