The tension between Nigerian financial authorities and cryptocurrency exchange platforms continues to escalate, with the government considering further measures to mitigate a currency crisis by potentially targeting digital currency exchanges for a shutdown.
Although official statements from the Nigerian Communications Commission (NCC), the Securities Exchange Commission (SEC), and the central bank have not been made public, it’s reported that the NCC may have instructed telecommunications operators to disrupt the operations of major cryptocurrency platforms including Binance, OctaFX, Coinbase, Kraken, and FXTM.
In a recent development, Bayo Onanuga, the Special Adviser on Information and Strategy to President Bola Tinubu, urged the central bank and the Economic and Financial Crime Commission to take action against the crypto industry. Onanuga specifically mentioned Binance, which has faced regulatory challenges in various countries and is accused of destabilizing the currency market.
He argued that Binance should not have the power to influence the value of the naira through its crypto exchange platform. Furthermore, he called for the banning of other crypto platforms such as Kucoin and Bybit from operating in Nigeria’s cyberspace and suggested that the FX platform Aboki, which had previously been banned, should be banned again.
The EFCC (Economic and Financial Crimes Commission) and the CBN (Central Bank of Nigeria) should take action against these platforms that are attempting to undermine our national currency. If we do not take decisive measures to ban crypto in our country, the devaluation of our currency will persist,” he further emphasized.
This statement comes two months after the nation’s central bank, now under the leadership of Governor Olayemi Cardoso, began to reverse its two-year-old policy that prohibited the use of personal and commercial bank accounts in facilitating cryptocurrency transactions.
Sources close to regulatory bodies suggest that the renewed crackdown on the cryptocurrency sector is driven by concerns that digital currency exchanges are being exploited by currency speculators and money laundering groups. These groups are believed to be engaging in activities that significantly weaken the naira’s value against the dollar.
Nigeria’s struggle with foreign exchange depreciation has been a source of anxiety for both investors and the general population. The naira’s depreciation against the dollar and other major currencies has not only intensified economic hardship but also prompted a withdrawal of multinational consumer goods companies from the country.
By the end of the last week, the exchange rate between the naira and the dollar exceeded N1,500 to $1 in the official foreign exchange market, and reached as high as N1,800 in the informal market. This represents a loss in value of approximately 230% within a year, contributing to inflation and increased social unrest.
In response to these challenges, Nigerian authorities are collaborating to target dollar racketeering. Crypto exchange platforms, caught in the crossfire, are now working with regulators to address these issues and mitigate the financial authorities’ concerns about the industry.
Binance, a leading player in crypto trading both in Nigeria and globally, has taken measures such as imposing limits on peer-to-peer transactions involving the USDT/NGN pair and suspending the sale of USDT on its platform.
Binance explained its actions in an official blog post: “To protect our users and prevent potential misuse, our system automatically pauses when there is significant currency movement. Late last night, we detected a temporary dip in prices that momentarily exceeded our system’s threshold. We promptly adjusted our system to allow trading to resume.”
