Binance, a platform for trading cryptocurrencies, has announced its decision to stop all services related to the Nigerian naira. This move comes after Binance faced accusations of contributing to the devaluation of the naira and was involved in various allegations including “terrorism financing, money laundering and tax evasion.”
Nigeria, being “one of the largest peer-to-peer crypto markets in the world,” saw cryptocurrency transactions reach “$56.7bn” between July 2022 and June 2023, as per Chainalysis. Despite this, Binance has advised its users to “withdraw NGN, trade their NGN assets or convert NGN into crypto” in light of ending these services.
Binance’s statement detailed the timeline and process for discontinuing naira services, stating, “From 2024-03-08 08:00 (UTC), any remaining NGN balances in users’ Binance accounts will be automatically converted to USDT based on the conversion rate below.” It further noted that “Binance will not support deposits of NGN after 2024-03-05 14:00 (UTC). Withdrawals of NGN will not be supported after 2024-03-08 06:00 (UTC).”
Regarding the conversion rate, the announcement explained, “After 2024-03-08 08:00 (UTC), Binance will convert any remaining NGN balances in users’ Spot and Funding wallets into USDT on behalf of users at a ratio of 1 USDT = 1,515.13 NGN,” with the rate being derived from “the average closing price of the USDT/NGN trading pair on Binance Spot in the last seven days.”
This decision has been shadowed by recent actions from the Nigerian government, which reportedly “detained at least two senior executives of Binance” following a ban on their website. The executives came to Nigeria and were “arrested by officials of the office of the National Security Adviser and their passports seized.” This was part of a broader crackdown on cryptocurrency exchanges to control speculation on the naira and prevent “continuous manipulation of the forex market and illicit movement of funds.”
Furthermore, the government through the Nigerian Communications Commission blocked “the online platforms of Binance and other crypto firms” and dispatched “operatives of the Economic and Financial Crimes Commission to arrest Bureau De Change operators.”
Regarding a parliamentary inquiry, “the executives of the foreign firm were expected to appear before the House Committee on Financial Crimes but they instead sent their lawyers to represent them.”