Binance Yield to Nigeria Regulators, Limits USDT to Naira Rate

Nigeria hits Binance with a massive $10 billion fine over allegations the crypto exchange illegally profited from forex activities that worsened the country's crippling currency crisis.

Key Insights

  • Binance caps Nigerian p2p USDT/naira rate at 1,802 after regulator pressures
  • Move follows clampdown on forex speculation seen as weakening the local currency
  • Binance says pause temporary but critical users accuse yielding to CBN controls

LAGOS (MarketsXplora) – Crypto exchange Binance said it has capped the price Nigerian users can trade Tether’s U.S. dollar-pegged stablecoin for local currency on its peer-to-peer platform, as part of efforts to appease the country’s regulators.

In a message to Nigerian users seen by MarketsXplora on Tuesday, Binance said traders cannot currently sell Tether’s USDT token above a 1,802 naira per USDT rate on its p2p platform. The move came after the Central Bank of Nigeria (CBN) and national security adviser clamped down on forex speculation seen as exerting pressure on the naira.

Binance p2p price pause irks Nigerian crypto traders

Users said the cap blocked accounts of traders attempting to sell USDT above that rate in recent days, sparking criticism among some over yielding to the CBN’s exchange rate management agenda.

But Binance said its systems “automatically pause” trading during periods of significant currency movements, adding that the cap was temporary as adjustments were made to restore full services.

Read also! Nigeria Detains Two Binance Executives Amid Crypto Crackdown

Nigeria has emerged as Binance’s biggest p2p market as users took to crypto to circumvent forex restrictions and benefit from lower fees than the formal banking system.

The CBN had banned banks from handling cryptocurrencies in 2021 before lifting it late last year. But authorities are still wary of speculative flows deemed to be weakening the naira, which fell sharply against the dollar after a central bank reform scrapped multiple exchange windows.

The regulator SEC also insists Binance has no clearance for crypto operations, despite users continuing to flock to its p2p services for remittances, commerce and investments.

Read also! Nigeria Blocks Binance, OctaFX, Coinbase in Bid to Strengthen Naira

Trading volumes on Binance p2p amounted to $99 million in the last week of January alone as prices hovered between 715-730 naira per dollar, almost twice the official rate.

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