Binance Faces Accusations of Manipulating Nigerian Naira Following ‘Glitch’ Affecting Peer-to-Peer Traders

Special adviser to the President of Nigeria, Bola Tinubu, Bayo Onanuga, criticized Binance for allegedly influencing the Nigerian exchange rate and overstepping the boundaries of the Central Bank of Nigeria (CBN). He expressed his views vehemently on platform X, stating,

“The EFCC and the CBN ought to confront these entities attempting to devalue our national currency to utter worthlessness. Without a total prohibition of Crypto in Nigeria, the persistent erosion of our currency’s value won’t stop.”

This commentary followed an incident where Nigerian users encountered trouble while attempting to offload USDT on the Binance P2P platform above a certain rate, leading to an “automatic pause” of the service yesterday.

Binance addressed the situation, calling it a “temporary suppression of prices.” They claimed to have made immediate corrections to their systems to normalize trading operations.

Amid these developments, numerous Binance patrons voiced their distress on social media over issues trading USDT, as the national currency reached all-time lows in comparison to the US dollar.

Discontented customers began seeking alternatives, and Ray Youssef, the previous CEO of Paxful, proposed his new platform, noOnes, as a solution. Additionally, interviews with users by CryptoSlate confirmed a switch to other P2P services like KuCoin and ByBit for stablecoin transactions.

The influence of Binance on Nigerian foreign exchange transactions

As a defense against inflation and currency devaluation, Nigerians have found refuge in purchasing digital assets through Binance. The Binance P2P platform has notably become an essential tool for exchange rate determination by Nigerian forex traders.

Under the weight of forex speculation and economic woes, the CBN has attempted to bring stability through various strategies. Unfortunately, these attempts have been largely fruitless.

Speculative trading, according to the CBN, has only aggravated inflation and rocked the nation’s fiscal stability further.

Former presidential aide, Bashir Ahmad, accused crypto exchanges of contributing to the debacle, noting that dependency on platforms not sanctioned for forex regulation can lead to unpredictable fluctuation of exchange rates, thus affecting organizations such as the Bureau De Change.

Femi Longe, a key market player, countered by mentioning that the rise of Bitcoin and cryptocurrencies in Nigeria was a direct consequence of restrictive foreign exchange policies previously set by the CBN.

Moreover, Binance has made clear that its platform is not designed for price discovery and insists that the price dynamics are driven by the free market, not as an alternative for the official currency rates in Nigeria.

In the wake of the CBN’s 2021 ban on crypto transactions by banking institutions, Nigeria witnessed a surge in P2P market activity. The prohibition was later revoked, but it came with stringent industry regulations.

Recent Binance data shows the high level of Nigerian engagement in crypto trades, with the USDT/NGN pair alone seeing 2.7 billion Naira in trades, which equates to approximately $1.5 million USDT, in just the previous day.