Crypto exchange Binance has removed Nigeria’s fiat currency, Naira, from the national currency it supports on its peer-to-peer platform, according to CryptoSlate sources.
Meanwhile, the Financial Times reported that two Binance executives have been detained in the country and had their passports confiscated. Binance employees had traveled to Nigeria to resolve the ban on crypto exchange websites in the country.
Nigeria has the highest peer-to-peer volume in the world due to the high level of adoption in the country. The development comes amid growing regulator concerns over Binance’s role in Nigeria’s currency challenges.
P2P exchange rate issues
Last week, the Nigerian government restricted access to the online platforms of several crypto companies, including Binance. The regulators argued that this would prevent what they saw as continued manipulation of the foreign exchange market and the unlawful movement of funds.
However, as is known in the crypto industry, exchange rates on P2P markets are not determined 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 with unstable fiat currencies. Exchange rates often fluctuate widely 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 prices of their currencies.
Binance has not yet responded Crypto Slates request for comment as of press time.
It is worth noting that the Nigerian Securities and Exchange Commission (SEC) declared Binance’s activities illegal in 2023, citing its lack of registration in the country.
Unverified transaction of $26 billion
Olayemi Cardoso, the governor of Nigeria’s Central Bank, recently told local media that Binance Nigeria allegedly facilitated the transfer of $26 billion from unknown sources last year.
Cardoso said:
“In the case of Binance, $26 billion has passed through Binance Nigeria in the past year, from sources and users we cannot adequately identify.”
Local media reported that Cardoso also reiterated the continued crackdown on crypto platforms and revealed cooperation between federal agencies to curb exchange rate distortions.
He reportedly said:
“[The authorities] are determined to do whatever it takes to ensure that we take control of our market, or in other words, not to allow others to manipulate our markets in ways that make us distorted and suboptimal for all Nigerians.”
Nigerians remain pro-crypto
Meanwhile, Nigeria’s young, tech-savvy population has shown keen interest in cryptocurrencies despite the government’s recent stance.
Victor Asemota, a prominent technology entrepreneur in Nigeria, highlighted the country’s dependence on cryptocurrencies for cross-border transactions, citing a lack of alternative, reliable channels.
Asemota added:
“You can’t kill crypto, it just becomes more hidden and sinister. What is within the government’s control is making other channels more efficient. Crypto is not easy to use, but it becomes easier when there are no choices. Provide simpler choices and people will use them.”
**Editor’s Note** Updated with information on the arrest of Binance executives and details on P2P markets and the open market exchange rate.
