The Federal Government has taken action against online platforms such as Binance and other cryptocurrency firms, alleging their involvement in manipulating the forex market.
Binance, a digital assets platform facilitating peer-to-peer transactions, allows users to advertise their interest in buying or selling currencies. In February 2021, the Central Bank of Nigeria (CBN) directed banks, non-bank financial institutions (NBFIs), and other financial entities to close accounts associated with cryptocurrency transactions. The CBN cited concerns over money laundering, terrorism financing, cybercrime, and the volatile nature of cryptocurrencies as reasons for the ban.
However, in December 2023, the CBN reversed its stance on crypto assets, instructing banks to disregard the previous ban on crypto transactions. The recent move against cryptocurrency websites aims to curb currency speculation activities in the country, with Binance clarifying that its platform does not determine currency pricing.
Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy, advocated for banning Binance and other crypto platforms from operating in Nigeria, citing restrictions faced by the platform in several jurisdictions worldwide.
In response, Binance emphasized that it does not operate as a price discovery platform, stating that FX rates are influenced by complex forces unrelated to the company. The platform provides a market-driven peer-to-peer (P2P) platform, which is not intended to serve as a proxy for currency pricing in Nigeria.
Users of the platform have reported difficulties in purchasing dollars. The platforms affected by the crackdown include Binance, Forextime, OctaFX, Crypto, FXTM, Coinbase, Kraken, Kucoin, and Bybit, among others widely used for cryptocurrency transactions in Nigeria.
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Reporting by David Okoroafor, News Writer in Lagos, Nigeria.
