Local cryptocurrency stakeholders have expressed their concern over the recent ban on Binance naira operations in Nigeria, stating that it will have a negative impact on the livelihoods of many Nigerians and could contribute to an increase in youth unemployment in the country.
In interviews with Cointelegraph, local crypto stakeholders explained that the removal of Nigerian naira-related services from Binance will pave the way for the emergence of new crypto exchanges that will comply with local regulations and fill the void left by Binance’s departure.
Nathaniel Luz, the CEO of Flincap, a liquidity platform for crypto exchanges, highlighted the plight of Nigerian traders who rely on peer-to-peer trading on Binance for their income. However, Luz noted that some traders have turned to alternative platforms such as WhatsApp and Telegram groups.
Oladotun Wilfred Akangbe, the chief marketing officer of Flincap, emphasized the ongoing uncertainty surrounding cryptocurrency regulation in Nigeria and the decision to suspend Binance operations. He expressed concerns that this could undermine the confidence of many individuals in the crypto space and potentially lead to widespread fear, uncertainty, and doubt.
In an official statement on its website, Binance announced that it would automatically convert naira balances to Tether (USDT) as of March 8 at 8:00 am UTC and cease support for naira deposits starting from March 5 at 2:00 pm. Withdrawals have been prohibited since March 8 at 6:00 am, and the conversion rate is set at 1 USDT for 1,515.13 naira. Binance’s peer-to-peer platform had already removed all naira trading pairs in late February.
This development comes after the governor of the Central Bank of Nigeria raised concerns about suspected illicit transactions taking place on crypto exchanges in the country, specifically pointing to “suspicious flows” of funds on Binance. As suspicions surrounding Binance’s alleged illicit operations in Nigeria escalated, the Nigerian House of Representatives Committee on Financial Crimes summoned Binance CEO Richard Teng to appear before the committee by March 4.
Furthermore, the Securities and Exchange Commission of Nigeria stated in 2023 that Binance Nigeria was not registered or regulated by the agency, rendering its operations in Nigeria illegal. However, in December 2023, the Central Bank of Nigeria reversed its stance on crypto assets and advised banks to disregard the previous ban on crypto transactions.
Overall, the ban on Binance naira operations in Nigeria has raised concerns among local crypto stakeholders, who anticipate the emergence of new exchanges to fill the void left by Binance’s departure. The future of cryptocurrency regulation in Nigeria remains uncertain, and the decision to halt Binance operations has created a sense of doubt and uncertainty within the country’s crypto community.