• Wednesday, April 24, 2024
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BusinessDay

Binance bails out of naira operations after clampdown

Nigeria wants Binance to pay $10bn fine

Binance is set to discontinue all naira services by March 8, 2024 following the clampdown by Nigerian regulators on the cryptocurrency exchange.

In a message to its users, the firm said it would convert all NGN balances in users’ accounts to USDT.

It said in a statement on Tuesday that it will stop supporting naira deposits. “Users are encouraged to withdraw NGN, trade their NGN assets or convert NGN into crypto prior to the discontinuation of these NGN services.”

Withdrawals of naira will be stopped by March 8, 2024, after which they will be converted to USDT at N1,515.13/USDT. “Please note that the conversion rate is calculated based on the average closing price of the USDT/NGN trading pair on Binance spot in the last seven days,” it said.

The conversion may take up to 24 hours or longer, Binance said. It highlighted that its auto invest will delist NGN after March 6, and naira will be removed from its list of supported payment options on Binance Pay on the same day.

“We thank you for your support as we continue to build the crypto ecosystem in a way that promotes transparency and long-term sustainable growth,” the crypto firm added.

In 2020, it added naira as its first African currency for peer-to-peer trading.

The latest move by Binance comes amid efforts by the Nigerian government to clip the exchange’s wings. Nigeria has accused the crypto exchange of manipulating the value of the naira against the dollar.

Olayemi Cardoso, governor of the Central Bank of Nigeria, recently disclosed that $26 billion flowed through Binance Nigeria in one year from sources and users the apex bank could not identify.

“Suffice to say that we are determined to do everything it takes to ensure that we take charge of our market and not allow others to manipulate it… We will not accept it and will do everything possible to prevent any infraction,” he said.

The firm has since said that “it is important to note that foreign exchange rates are influenced by various complex factors, which Binance has no influence on.”

However, in the last three weeks, authorities in the country have asked the crypto platform to disable USDT trades in naira and restricted access to crypto firms’ websites.

Currently, the Binance P2P market is officially unavailable in Nigeria. Last week, two of the firm’s executives were detained as authorities allegedly demanded to see the list of the firm’s Nigerian users.

“The government is focusing on the wrong thing in their effort to tackle the naira’s issue,” Chimezie Chuta, founder and coordinator of Blockchain Nigeria User Group, recently told BusinessDay.

On its X page, Binance highlighted that users can continue using its other services and products for other available cryptocurrencies.

Victor Abiola, who described himself as an affiliate and representative for Binance Africa, said on X: “No need for panic. Everything still works perfectly well. How many of us actually trade NGN/USDT before this message? Other coins, products and services are working perfectly…”

Nigeria has one of the largest P2P crypto markets in the world, with crypto transactions reaching $56.7 billion between July 2022 and June 2023, according to Chainalysis. Since Nigeria’s crackdown on Binance began, crypto traders have shifted to other platforms, including Telegram, to continue their P2P transactions.