Binance Succumbs To Regulatory Scrutiny, Pulls Out Of Nigeria In Major Setback

Binance, the world’s largest cryptocurrency exchange, has suspended all Nigerian naira (NGN) services due to mounting regulatory scrutiny in the country. 

The decision came as the Nigerian government accused Binance of manipulating foreign exchange rates and demanded significant compensation. 

Binance Accelerates Withdrawal From Nigerian Market

In an update on its website, Binance revealed that starting this Friday, any remaining NGN balances in user accounts will be automatically converted to Tether’s stablecoin USDT. 

Additionally, by March 8, Binance will convert all remaining Naira-denominated balances in user wallets into USDT. The exchange will also delist all existing Naira spot trading pairs, including those involving Bitcoin and USDT, from March 7.

The decision to halt Nigerian naira services follows Binance’s earlier delisting of all Naira trading pairs on its peer-to-peer platform on February 28. The Nigerian government has intensified its regulatory actions against the exchange, demanding nearly $10 billion in compensation. Furthermore, according to multiple media reports, two senior executives from Binance were arrested last week.

Nigeria’s Crypto Landscape In Turmoil

The Nigerian naira has experienced a significant devaluation of nearly 70% in recent months as the country grapples with a currency crisis and soaring inflation. These economic challenges have prompted the government to scrutinize financial activities and crack down on potential wrongdoings in the crypto industry.

The House of Representatives Committee on Financial Crimes of Nigeria has also issued a seven-day ultimatum for Binance and its CEO to appear before them in response to allegations of involvement in financial crimes, as Bitcoinist reported on Monday. 

The committee had previously summoned Binance’s Managing Director, citing accusations of terrorism financing, money laundering, tax evasion, and other offenses. The committee is committed to combatting financial crimes and safeguarding Nigerian investors from “predatory practices.”

The suspension of Binance’s Nigerian naira services marks a significant development in the country’s crypto landscape. As one of the largest crypto markets globally, Nigeria has witnessed a surge in cryptocurrency adoption and trading activity.

However, the increased regulatory scrutiny and government actions pose challenges for Binance and Nigerian cryptocurrency enthusiasts.

As the situation unfolds, market participants will closely monitor the implications of these regulatory developments and their impact on Nigeria’s crypto ecosystem. The exchange’s decision to halt NGN services underscores the growing complexities and risks of operating in an evolving regulatory landscape.

As Bitcoin (BTC), the leading cryptocurrency on the market, hit a new all-time high (ATH) of $69,300 on Tuesday and subsequently dropped to the $65,000 mark, Binance Coin (BNB), the exchange’s native token, followed the flagship cryptocurrency’s footsteps, dropping over 3% in a matter of hours to a current trading price of $406.

Featured image from Shutterstock, chart from TradingView.com