Key takeaways:
- Amid a crackdown on cryptocurrency exchanges, the Nigerian government requests $10 billion in reparations.
- The P2P feature allows users, buyers, and sellers to deal without needing a middleman.
In the midst of a crackdown on cryptocurrency exchanges, the Nigerian government is requesting $10 billion in reparations; thus, cryptocurrency trading site Binance has withdrawn the naira from its peer-to-peer (P2P) service.
The special adviser to President Bola Tinubu, Bayo Onanuga, provided an update on the compensation demand in a BBC interview on March 1. This was part of the measures to stabilize the local currency. According to Onanuga, Binance’s arbitrary manipulation of foreign exchange values would force the Nigerian economy to collapse if it were not prevented.
The P2P feature allows users, buyers, and sellers to deal without needing a middleman. Following the government’s ban on the country’s booming cryptocurrency business during the administration of former President Muhammadu Buhari, it gained popularity in Nigeria in 2021.
As a result of the naira’s sharp depreciation and the ensuing nearly three-decade-high inflation rate of 29.9%, the government shifted its attention to websites that offer bitcoin services. These websites have gained notoriety for their ability to trade and determine the naira’s informal value.
Nigerian cryptocurrency users have previously complained about having trouble accessing various cryptocurrency exchange platforms, such as Binance, OctaFX, and others. A few days later, traders were unable to sell USDT for more than 1,802 naira per USDT due to Binance’s restriction on the selling price of Tether tokens on its P2P network.
In contrast to the conjectures of the nearby cryptocurrency community, the exchange clarified that the price peg resulted from an automated system halt.
Since the Central Bank of Nigeria (CBN) voiced concerns in 2023 regarding “suspicious flows” of funds using Binance Nigeria, Binance has come under further scrutiny in Nigeria.
Olayemi Cardoso, the head of CBN, noted that $26 billion from anonymous users and sources went through Nigeria via Binance in 2023.
In an effort to rein in cryptocurrency exchanges and quell naira-related speculation, the National Security Adviser’s office reportedly detained two senior Binance officials in Abuja.
Local cryptocurrency analysts are disappointed with the government’s disdain for cryptocurrencies as a means of easing the country’s foreign exchange problem. A Nigerian cryptocurrency fan stated on X that if the country doesn’t concentrate on producing and exporting and keeps criticizing cryptocurrencies, its financial issues will not disappear.
The US Attorney’s Office has petitioned a federal judge to allow Changpeng “CZ” Zhao, the former CEO of Binance, further travel limitations. In a document submitted on February 23 to the US District Court for the Western District of Washington, US Attorney Tessa Gorman requested that Magistrate Judge Brian Tsuchida grant a motion defining the conditions of CZ’s bond release.
