The termination of Naira operations by Binance in Nigeria has caused fear of negatively affecting income sources for many Nigerians and increasing youth unemployment rates. In discussions, crypto stakeholders in the country forecasted that Binance’s withdrawal from Nigeria could encourage the development of new crypto exchanges that can fill the void by complying with local regulations.
Steps Taken After Binance’s Departure
Flincap’s CEO Nathaniel Luz emphasized that Nigerian investors who relied on Binance are in a state of urgency. He noted that some investors have adapted by moving their affected operations to WhatsApp and Telegram groups.
Flincap’s marketing director Oladotun Wilfred Akangbe expressed concerns about the uncertainty in cryptocurrency regulations in Nigeria. With Binance suspending operations, there is a belief that trust within the Nigerian crypto community could be seriously undermined, increasing fear, uncertainty, and doubt.
Binance Announces Major Changes for Nigerian Users
Binance announced significant changes for Nigerian users. The platform declared that starting from March 8, it would automatically convert Naira balances to Tether (USDT) and that Naira deposit operations would be halted from March 5. Withdrawal operations were also stopped on the morning of March 8, and the conversion rate was set at 1 USDT for 1,515.13 Naira.
These developments are set against the backdrop of the Governor of the Central Bank of Nigeria expressing suspicions about crypto exchanges, including Binance, being involved in illegal transactions and citing “suspicious fund flows.” These suspicions increased when the Nigerian House of Representatives Committee on Financial Crimes summoned Binance CEO Richard Teng to a meeting before March 4.
The regulatory environment in Nigeria has been volatile, with the Securities and Exchange Commission declaring in 2023 that Binance Nigeria was not registered or legally approved, thereby making its operations illegal. However, in a surprising turn, the Central Bank of Nigeria advised banks in December 2023 to permit crypto transactions, which was a complete reversal from the previous crypto ban.
As seen in the case of Nigeria, it seems that central banks in some countries are somewhat confused. The presence of approaches that are fundamentally opposed to each other is striking. However, one fact remains clear: the realm of cryptocurrency is now a reality for the entire world.
