The ban on Binance’s naira operations in Nigeria has drawn significant concern from local cryptocurrency stakeholders, who fear it will negatively impact many Nigerians’ livelihoods and potentially increase youth unemployment.
In discussions with Cointelegraph, stakeholders expressed their concerns over the delisting of Nigerian naira-related services from Binance, predicting that it could spur the development of new crypto exchanges aimed at filling the void left by Binance’s departure through compliance with local regulations.
Nathaniel Luz, CEO of Flincap—a liquidity platform for crypto exchanges—highlighted the immediate effect on Nigerian traders reliant on Binance for peer-to-peer trading.
Luz pointed out that, while affected, some traders have adapted by moving their operations to WhatsApp and Telegram groups.
Oladotun Wilfred Akangbe, Flincap’s chief marketing officer, voiced concerns over the ongoing uncertainty in cryptocurrency regulation within Nigeria.
He believes the suspension of Binance operations could significantly erode confidence within the Nigerian crypto community, fostering a climate of fear, uncertainty, and doubt.
Binance, in a statement on its website, announced significant changes for its Nigerian users.
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Starting March 8, at 8:00 am UTC, the platform will automatically convert naira balances to Tether (USDT) and will stop supporting naira deposits from March 5, at 2:00 pm.
Withdrawals were halted from March 8, at 6:00 am, with the conversion rate set at 1 USDT for 1,515.13 naira. This move came after Binance delisted all naira trading pairs in late February.
The backdrop to these developments includes the Central Bank of Nigeria’s governor expressing suspicions on February 27 about crypto exchanges, including Binance, being involved in illicit transactions, citing “suspicious flows” of funds.
These suspicions led to increased scrutiny on Binance’s operations, with the Nigerian House of Representatives Committee on Financial Crimes summoning Binance CEO Richard Teng for a meeting before March 4.
The regulatory landscape in Nigeria has been fluctuating, with the Securities and Exchange Commission stating in 2023 that Binance Nigeria was not registered or regulated by it, rendering its operations illegal.
However, in a surprising turn, the Central Bank of Nigeria reversed its earlier stance on crypto assets in December 2023, advising banks to disregard the previous ban on crypto transactions.
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