Nigerian Govt Targets Binance, Crypto Firms for Forex Market Disruptions

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The Federal Government has taken action against the online operations of Binance along with several other digital currency entities due to purported manipulations within the foreign exchange market. Binance operates as an online venue for digital asset transactions, facilitating peer-to-peer exchanges where users can post their interest in either selling or purchasing various currencies.

Nigerian Govt Targets Binance, Crypto Firms for Forex Market Disruptions
Binance CEO Declares ‘Binance Nigeria Limited’ Scam Entity

On the 5th of February, 2021, the Central Bank of Nigeria (CBN) issued an order to banks, non-banking financial institutions (NBFIs), and other financial bodies to terminate the accounts of individuals or organizations participating in digital currency dealings.

The financial regulator also cautioned local banking entities against engaging in or supporting transactions related to digital currencies.

The CBN highlighted issues such as the risk of money laundering, the financing of terrorism, the threat of cyber crimes, and the inherent instability of digital currencies as the rationale behind this prohibition.

However, in December 2023, the Central Bank of Nigeria revised its previous position on digital currencies, advising banks to lift the February 2021 prohibition on digital currency transactions.

The recent crackdown on cryptocurrency-related websites is designed to curb speculative activities affecting the nation’s currency, with Binance clarifying that its platform does not engage in currency valuation.

Bayo Onanuga, the Special Adviser on Information and Strategy to President Bola Tinubu, has voiced opinions that Binance, along with similar digital currency platforms, should not be permitted to operate within Nigeria.

He mentioned that the digital currency trading entity is currently facing regulatory challenges in several countries, including the United States, Singapore, Canada, and the United Kingdom.

In response, Binance has stated that it does not serve as a platform for discovering currency prices and that foreign exchange rates are subject to intricate dynamics beyond the company’s influence.

The company explained that it offers a peer-to-peer (P2P) marketplace driven by market forces, which should not be used as an alternative for determining currency values in Nigeria.

Users of the platform have expressed difficulties in purchasing dollars.

Among the platforms that have been restricted are:

  • Binance
  • Forextime
  • OctaFX
  • Crypto
  • FXTM
  • Coinbase
  • Kraken
  • Kucoin
  • Bybit

Additionally, there are numerous other platforms involved in cryptocurrency transactions within Nigeria.

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