Binance, a major global cryptocurrency exchange, recently announced its decision to withdraw from the Nigerian market. This includes the discontinuation of all services in the local fiat currency, the Nigerian naira (NGN).
According to the official announcement made on March 5, Binance will suspend NGN withdrawals after March 8. Any remaining NGN balances in users’ Binance accounts will be automatically converted to the Tether (USDT) stablecoin.
To prepare for the discontinuation of NGN services, Binance has advised users to withdraw their NGN, trade their NGN assets, or convert NGN into crypto. The conversion rate will be based on the average closing price of the USDT/NGN trading pair on Binance Spot over the past seven days.
Additionally, NGN deposits will be immediately suspended, with transactions not being supported after 2:00 pm UTC on March 5. On March 7, all trading pairs involving NGN will be removed from Binance. Binance Pay, the exchange’s payment service, will also remove NGN as a supported payment option on March 6.
This decision by Binance to completely remove the Nigerian naira from its platform comes at a time when the company is facing significant regulatory scrutiny in Nigeria. The governor of the Central Bank of Nigeria has raised concerns about crypto exchanges in the country being involved in illicit transactions, specifically pointing out “suspicious flows” of funds at Binance.
In addition, Nigeria’s National Security Adviser has reportedly confiscated the passports of two Binance executives in Abuja, the capital. These executives, who are citizens of the United States and the United Kingdom, are believed to be connected to the alleged illicit operations of Binance in Nigeria.
As suspicions surrounding Binance’s activities in Nigeria continue to grow, the Nigerian House of Representatives Committee on Financial Crimes has called for Binance CEO Richard Teng to appear before the committee to address these concerns. The committee’s chair has issued an ultimatum for Binance’s management to appear on or before March 4.
It is worth noting that Nigeria has been experiencing rapid growth in its crypto economy in recent years. In fact, Chainalysis, a leading crypto intelligence firm, ranked Nigeria second in the world in terms of cryptocurrency adoption in September 2023. Additionally, Nigeria was identified as the most crypto-obsessed country in the world based on the number of Google searches for “cryptocurrency” or “buy crypto” in August 2022.
However, regulators in Nigeria seem to be less supportive of the country’s high rate of crypto adoption. In February 2024, an adviser to Nigeria’s president called for a ban on Binance, KuCoin, and other crypto trading platforms in the country. Furthermore, Nigeria’s central bank banned regulated financial institutions from providing services to crypto exchanges two years ago.
In conclusion, Binance’s decision to exit the Nigerian market and discontinue NGN services is a result of regulatory scrutiny and concerns surrounding its operations in the country. Nigeria, despite its growing crypto economy, is facing increasing pressure from regulators regarding crypto adoption.