Binance makes u-turn, says it didn’t restrict USD/NGN rate at $1802; experts react

Temitope Akintade
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Crypto exchange Binance has reacted to the latest development surrounding the suppression of USDT/NGN rates on its peer-to-peer marketplace. According to a statement published on its website on Wednesday morning, Binance urged its users not to believe the FUD (Fear Uncertainty and Doubt). 

We would like to assure users that their funds are secure and our peer-to-peer (P2P) product remains operational,” the statement reads.

The company said in a bid to protect users, and prevent any abuse, its system automatically pauses in the event of a period of significant currency movement.

Late last night, we observed a temporary suppression of prices that briefly reached our system limit. We quickly made the necessary adjustments to allow trading to continue,” the exchange said.

In tandem with that announcement, Technext can confirm that the naira is now trading at almost N1900 against the US dollar on the Binance p2p as against what was obtainable on the platform last night where traders were not allowed to update buy/sell rates above $1802, even after the rate had gone above that on other platforms and exchanges. 

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In this new announcement, Binance however added that it continues to actively engage with regulators, policymakers and other relevant stakeholders to foster an open transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.  

A backstory on the Binance development 

It is no longer news that the Nigerian currency has continued a free fall in an unprecedented manner. This challenge, which has brought about inflation and widespread economic damage has made the Central Bank of Nigeria (CBN) and the Nigerian authorities take stringent actions on FX players.

Binance Nigeria limited

Earlier on Tuesday, after the Nigerian currency fell to a record low of around N1802 to the dollar, p2p merchants on crypto exchange, Binance noticed they could not update buy/sell rates above $1802, even after the rate had gone above that on other platforms and exchanges. 

With that development , there were reports that Nigerian authorities connived with Binance to restrict p2p trading on the platform, in a bid to save the ailing naira. To fuel that sentiment, Binance published a statement to announce that it continues to work hand in hand with local authorities, lawmakers, and regulators to ensure it acts on non-compliance. 

Our shared goal is to protect users while promoting innovation.” 

The world largest crypto exchange also disabled purchase of cryptocurrencies via P2P for its Nigerian users, leaving those who might want to sell their crypto assets stuck. 

This comes as another desperate move by the Bola Tinubu-led government to stem naira freefall against the dollar. Recall that on Monday, the Economic and Financial Crimes Commission (EFCC) busted purported FX speculators at a popular Bureau De Change office in Abuja.  

Also on Tuesday, Nuhu Ribadu, the National Security Adviser directed law enforcement agencies to take firm measures against anyone engaged in foreign exchange market speculation.

Reactions to the development 

These developments have expectedly sparked controversy. Some are of the opinion that p2p activities on Binance fuel naira free fall while others say there are more macroeconomic factors behind the collapse of the local currency. 

Some crypto traders say by disabling the sell option for its Nigerian users, blocking them from selling fiat currency, USDT, on the platform and capping the buy option to $1802, Binance had ‘betrayed the trust’ of its customers. 

Chris Ani, one of the loud voices of the Nigerian crypto industry who commented on the development on X (Twitter) said this restriction would contribute nothing to stop naira from falling, further attributing the move to ‘mediocrity.’

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Reactions from other Nigerian crypto experts show they are not pleased with the decision, with many calling for an outright boycott of Binance.

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Etienne Okeke, CEO of BitBarter, a Nigerian crypto exchange, in a chat with Technext, said Binance as an exchange should not interfere with market prices for it might not be helpful to solve the high USD demand problem.

He added that this move is not sustainable and the country will have to earn more USD, maybe by cutting costs, increasing exportation, more foreign direct investment, security, and others.

“It is a journey in which we need to make a sincere effort to fix.”

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