Binance, the popular cryptocurrency trading platform, has made the decision to remove the Nigerian currency, the naira, from its peer-to-peer (P2P) service. This comes as the Nigerian government demands $10 billion in compensation amidst its crackdown on the crypto exchange.
In a recent BBC interview, Bayo Onanuga, President Bola Tinubu’s special adviser, revealed the details of the compensation demand. The government believes that Binance’s arbitrary fixing of foreign exchange rates could have a detrimental effect on the stability of the local currency and the overall Nigerian economy.
The P2P feature on Binance allows users to trade directly with each other without the need for a third party. This feature gained popularity in Nigeria after the government banned the thriving crypto industry during the administration of former President Muhammadu Buhari.
As the value of the naira continues to decline and the inflation rate reaches a nearly three-decade high of 29.9%, the Nigerian government has turned its attention to platforms that provide cryptocurrency services. These websites have become known for their ability to establish an informal value for the naira through trading.
Crypto users in Nigeria have reported difficulties accessing various crypto exchange websites, including Binance and OctaFX. Binance, in response, implemented a limit on the selling price of Tether (USDT) tokens on its P2P platform. This move has left traders unable to sell USDT above a certain price per unit.
Contrary to speculation, Binance explained that the price limit was due to an automatic system pause, rather than any intentional action on their part.
Binance is facing increased scrutiny in Nigeria as the Central Bank of Nigeria (CBN) raises concerns about suspicious financial flows through Binance Nigeria. The CBN claims that $26 billion has passed through Nigeria via Binance from unidentified sources and users.
Reports have also emerged that two senior Binance officials have been detained by the National Security Adviser’s office in Abuja. It seems that the Nigerian government is determined to crack down on cryptocurrency exchanges in an effort to curb speculation surrounding the naira.
Local crypto analysts have expressed disappointment in the government’s unfriendly stance towards cryptocurrencies. They believe that the nation’s financial challenges will persist if the government continues to antagonize cryptocurrencies instead of focusing on manufacturing and exporting.
Cointelegraph has reached out to Binance for comment on the situation.
In other news, Bitcoin usage in Senegal has been gaining attention. The African country has been utilizing BTC for various reasons, highlighting the growing adoption of cryptocurrencies in the region.