In the midst of a crackdown on cryptocurrency exchanges, the Nigerian government is requesting $10 billion in reparations, thus cryptocurrency trading site Binance has withdrawn the naira from its peer-to-peer (P2P) service.
The special adviser to President Bola Tinubu, Bayo Onanuga, provided an update on the compensation demand in a BBC interview on March 1. This was part of the measures to stabilize the local currency. According to Onanuga, Binance’s arbitrary manipulation of foreign exchange values would force the Nigerian economy to collapse if it were not prevented.
Users, buyers, and sellers can transact without the involvement of a third party thanks to the P2P feature. Following the government’s ban on the country’s booming cryptocurrency business during the administration of former President Muhammadu Buhari, it gained popularity in Nigeria in 2021.
As a result of the naira’s sharp depreciation and the ensuing nearly three-decade-high inflation rate of 29.9%, the government shifted its attention to websites that offer bitcoin services. These websites have gained notoriety for their ability to trade and determine the naira’s informal value.
Nigerian cryptocurrency users have previously complained about having trouble accessing a variety of cryptocurrency exchange platforms, such as Binance, OctaFX, and others. A few days later, traders were unable to sell Tether (USDT) tokens on Binance’s peer-to-peer network above 1,802 naira per USDT due to a limit placed on the selling price of the tokens.
In contrast to the conjectures of the nearby cryptocurrency community, the exchange clarified that the price peg resulted from an automated system halt.
Since the Central Bank of Nigeria (CBN) voiced concerns in 2023 regarding “suspicious flows” of funds using BinanceNigeria, Binance has come under further scrutiny in Nigeria. Olayemi Cardoso, the head of the CBN, noted that $26 billion from unknown users and sources went through Nigeria via Binance in 2023.
In an effort to rein in cryptocurrency exchanges and quell naira-related speculation, the National Security Adviser’s office reportedly detained two senior Binance officials in Abuja.
Local cryptocurrency analysts are disappointed with the government’s disdain for cryptocurrencies as a means of easing the country’s foreign exchange problem. According to a Nigerian cryptocurrency fan on X, the country’s financial issues would not go away if it keeps criticizing cryptocurrencies and loses focus.