Key Insights
- Binance to discontinue all services for Nigeria’s naira currency from March 8
- Follows reports of $10B payment demand, executive detentions over alleged illegal transactions
- Part of widening crackdown by Nigerian authorities against unauthorized crypto platforms
LAGOS (MarketsXplora) – Binance, the world’s largest cryptocurrency exchange, said on Tuesday it will discontinue all services involving Nigeria’s naira currency from next week amid an escalating regulatory clash in Africa’s biggest economy.
In an announcement, Binance said it will automatically convert all remaining naira balances to the stablecoin Tether at a rate of 1 USDT per 1,515.13 naira starting March 8 at 8:00 a.m. UTC.
Naira deposits will cease after 2:00 p.m. UTC on Tuesday, while withdrawals in the fiat currency will stop being processed from March 8 at 6:00 a.m. UTC, Binance said.
The exchange will also delist all spot trading pairs against the naira from March 7 at 3:00 a.m. UTC, with open orders to be automatically closed.
Other Binance services like its P2P platform, convert feature, auto-invest products and pay services will also drop naira support over the coming days, the exchange operator said.
The move follows unconfirmed Nigerian media reports that authorities are demanding at least $10 billion from Binance over allegedly illegal crypto transactions that damaged the naira currency.
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The reports also said Nigerian security forces detained several senior Binance executives in Abuja as part of the regulatory probe into unlicensed cryptocurrency platforms.
Binance did not comment on the reported allegations or detentions. MarketsXplora could not independently verify the claims.
The reported crackdown caps a dramatic escalation in Nigeria’s approach to the crypto sector as embattled policymakers try to defend the naira amid a shortage of foreign exchange reserves.
Africa’s largest economy was an early adopter of central bank digital currencies, launching its eNaira in 2021.
But the following year, Nigerian regulators barred commercial banks from servicing crypto exchanges, disrupting their operations in a bid to curb alleged speculation and money laundering.
The restrictions forced many exchanges like Binance to pivot to peer-to-peer services, while fuelling a vast underground market in cryptocurrencies led by retail traders seeking alternatives to the naira.
This thriving informal crypto economy has alarmed Nigerian authorities who say it worsens pressure on the naira by enabling illicit forex transfers and arbitrage between official and parallel exchange rates.
The reported Binance probe suggests regulators are taking an increasingly confrontational stance to curb the crypto trading they blame for naira weakness.
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But outright prohibitions may disproportionately hit Nigerian individuals and businesses relying on crypto rails for cross-border payments and remittances.
“We have nonetheless been left with no choice but to cease naira service as we cannot process naira trades until we achieve regulatory compliance,” a Binance spokesperson told MarketsXplora.
Nigeria is the latest global jurisdiction to pursue tough enforcement action against unauthorized crypto platforms, following a wider regulatory crackdown on the loosely-governed industry.