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REGULATION | Allegations of Government Inattention Cause Binance to Stop Serving Users in Nigeria

As the local Naira fluctuates, users of the Binance P2P service claim that the government is meddling with the site, making it impossible for them to finish their trades.

On February 20, 2024, the value of the Naira plunged precipitously against the US dollar, going from N1,500 to N1,600. According to reports from the local community, the Naira reached an all-time low of N1,800 to a dollar on the black market.

Based on multiple social media complaints, it appears that some customers were having issues with Binance, while others were complaining about the lack of advertisements to purchase the USDT stablecoin. Social media was used by users to vent about the app’s malfunctions.

The government believes that Binance P2P, which is one of the primary channels for locals to buy cryptocurrencies like stablecoins to preserve their value, is mostly to blame for the Naira’s depreciation.

A local newspaper claims that the authorities took action against Binance and other cryptocurrency companies after learning that money launderers and currency speculators were using them to carry out illegal operations.

According to a well-known tweet by X user Brother Bernard, the Central Bank of Nigeria allegedly gave Binance the order to impose a cap on traders selling USDT. Other rumors suggest that the central bank may employ telecoms to block access to certain websites and apps in Nigeria.

In the midst of the uproar, Binance declared in a statement that it is “committed to offering users a market-driven, fraud-free, and manipulation-free platform.”

“We are always making investments to improve our tools and processes, which include processes for taking action against any market manipulators, requiring and increasing deposits for merchants posting ads, filtering and removing bad ads, and setting an upper limit for ads.”

The most recent changes have occurred just a few months after the Central Bank of Nigeria removed an embargo on banks and other financial organizations interacting with cryptocurrency exchanges and other providers of digital assets.

The top bank admitted in a circular to banks dated December 22, 2023, that it is unreasonable to maintain the stringent restrictions placed on financial institutions in 2021 given the growing demand and acceptance of cryptocurrencies worldwide.

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