In a significant development for Nigeria’s crypto community, the recent exit of Binance from the Nigerian market has sparked a mix of fears and opportunities. Local stakeholders express concerns about the impact on livelihoods, particularly for traders who relied on Binance’s naira operations for their income. The void left by Binance’s departure is expected to pave the way for new crypto exchanges to emerge, catering to the local market while adhering to regulatory requirements.
Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, notes the immediate effects on Nigerian traders who engaged in peer-to-peer trading on Binance. Despite the challenges, Luz highlights that some traders have adapted by shifting their activities to WhatsApp and Telegram groups.
Oladotun Wilfred Akangbe, Chief Marketing Officer of Flincap, underscores the ongoing uncertainty surrounding cryptocurrency regulations in Nigeria. The decision to halt Binance operations, coupled with regulatory ambiguity, raises concerns about eroding confidence in the crypto space, potentially fostering fear, uncertainty, and doubt among participants.
Binance, in an official statement, announced the automatic conversion of naira balances to Tether (USDT) at a specified rate and the cessation of support for naira deposits. Withdrawals have been restricted since a specified date, and Binance’s peer-to-peer platform delisted all naira trading pairs in late February.
The Central Bank of Nigeria’s governor, on February 27, voiced suspicions of illicit transactions on crypto exchanges in the country, pointing to “suspicious flows” at Binance. This led the Nigerian House of Representatives Committee on Financial Crimes to summon Binance CEO Richard Teng before March 4 for clarification.
Adding to the regulatory backdrop, Nigeria’s Securities and Exchange Commission declared in 2023 that Binance Nigeria operated illegally as it was not registered or regulated by the commission. However, a reversal in December 2023 saw the Central Bank of Nigeria advising banks to disregard the previous ban on crypto transactions, signaling a dynamic regulatory landscape for the country’s crypto industry.
