Nigerian Government Blocks Access to Binance, Coinbase, and Others to Shore Up Sliding Naira

News broke late Wednesday of the Nigerian government blocking access to major cryptocurrency exchanges like Kraken, Binance, and Coinbase, and this came as a shock to many of us (Nigerians). This dramatic move represents the latest escalation in Nigeria’s efforts to shore up the declining naira and curb unregulated cryptocurrency trading.

The clampdown highlighted growing concerns over how crypto speculation has weakened the local currency. It also thrust Nigeria into the global spotlight, underscoring the country’s emerging leadership in the peer-to-peer (P2P) crypto trading market.

I followed the whole event as it happened and have firsthand information about this. The news about the potential collaboration between the Nigerian government and Binance led to much speculation about the implications, with many people dismissing it as fake news following Binance’s statement refuting the rumors.

Clampdown on P2P Trading

What emerged as major news was an order from the Nigerian government to cap the dollar to naira rate on peer-to-peer (P2P) trading platforms at 1,802 naira per USDT.

These moves come amidst a major decline of the Nigerian naira, which depreciated over 300 naira in less than a week. The government believes the issue is partly caused by those speculating on the naira and USDT exchange rate on Binance, as many use the system as a value manipulation tool.

The news and speculation sent fear among P2P traders and USDT holders on Binance, prompting many to liquidate their USDT holdings for naira. This strengthened the naira against USDT, reducing the rate from 1,900 to as low as 1,600 naira by day’s end.

Blocking Access

By nightfall, the Binance website and apps were no longer accessible, forcing many to use VPNs to access the exchange. This confirmed the reports of Binance being blocked. The blocking continued into this morning. However, the Binance app started working normally again on mobile (without a VPN) while the website remains inaccessible as of this writing.

Binance is central to the discussion as the leading crypto exchange in Nigeria. Recent reports highlight Nigeria’s strong P2P trading volume, securing the top spot globally according to Chainalysis’ 2023 Geography of Cryptocurrency Report. This underscores Nigeria’s significance in the crypto landscape, especially for P2P transactions.

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Some Prominent Figures Support the Move

The ban extended to other crypto exchanges and forex companies operating in the country.

While many prominent figures discouraged the move, the naira’s rapid gains against the dollar suggest the government’s strategy to curb USDT-naira P2P trading’s negative impact on the naira could be right.

For example, crypto entrepreneur Reno Omokri tweeted his support for the steps taken to curb naira speculation on Binance, saying: “It is too easy to use fake Naira to USDT transactions to game the market and manipulate the value of the Naira. Binance had similar problems in the U.S. and had to pay a $4.3 billion fine. The Nigerian government should not just intervene forcefully. We should also fine Binance for not taking steps to stem currency manipulation. If you don’t find them, they won’t stop what is a profitable scam. Crypto is too unregulated. If left on its own, economic saboteurs will use it to undermine Nigeria’s economy and currency.”

This perspective highlights how unregulated crypto trading could enable manipulation of the naira, supporting the government’s actions to protect the currency’s value. While controversial, the interventions appear to have bolstered the naira in the short term.

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Temitope Olatunji
Temitope Olatunji

Temitope is a seasoned writer with over four years of experience. He specializes in Web3 and FinTech topics and enjoys creating content in these areas. He holds both a bachelor's and master's degree in Linguistics. When not writing, he trades forex and plays video games.