Allegations Against Binance
On Feb. 21, Bayo Onanuga, a special adviser to Nigerian President Bola Tinubu, took to social media to accuse Binance of manipulating the exchange rate for Nigeria and encroaching on the role of the Central Bank of Nigeria (CBN). He urged regulatory bodies like the Economic and Financial Crimes Commission (EFCC) and the CBN to take action against platforms allegedly manipulating the national currency.
Platform Disruption and Response
Binance’s peer-to-peer (P2P) platform for Nigerian users experienced a disruption, leading to an automatic pause in trading after users encountered difficulties selling USDT above a specific price. Binance acknowledged the issue, describing it as a “temporary suppression of prices.” The platform promptly adjusted its system to address the problem and resume trading activities.
User Frustration and Shift to Alternatives
The disruption caused frustration among users unable to trade USDT on the platform, particularly as Nigeria’s fiat currency plummeted against the US dollar. Many users turned to alternative platforms like noOnes, KuCoin, and ByBit for trading stablecoins, seeking to mitigate the impact of the disruption.
Binance’s Role in Nigerian Forex Trading
Binance has become a significant platform for Nigerians seeking to purchase digital assets amid economic uncertainties, including rising inflation and currency devaluation. The Binance P2P platform plays a crucial role in price discovery for Nigerian forex traders, offering an alternative avenue for accessing digital assets.
CBN’s Efforts and Challenges
The Central Bank of Nigeria (CBN) has implemented measures to stabilize the economy and currency amidst forex speculation. However, the reliance on crypto platforms, exacerbated by previous policies restricting foreign exchange access, has posed challenges for the CBN in regulating forex activities and stabilizing the financial economy.
Binance clarified that it does not serve as a price discovery platform and emphasized that market forces determine prices on its platform. Despite this, significant trading activity involving Nigerian traders was observed, with the USDT/NGN trading pair alone recording substantial transactions.
