Cessation of Naira Support by Binance due to Regulatory Pressure in Nigeria
In a series of regulatory actions and investigations, the Nigerian government has significantly restricted Binance's operations within the country. The cryptocurrency exchange's Naira fiat services and P2P support have been suspended since early 2024, following allegations of foreign exchange market manipulation and devaluation of the Naira.
The legal challenges escalated in 2024 when Nigeria filed a massive lawsuit against Binance, seeking damages of $81.5 billion and unpaid taxes amounting to about $2 billion. The government argues that Binance, despite not being registered in the country, has a "significant economic presence" and is thus liable for corporation tax.
Despite these legal hurdles, the Nigerian government maintains a positive outlook on blockchain technology and digital assets. The focus is on regulation rather than prohibition, with the government aiming to protect investors and foster a regulated crypto environment. This is evident in the new laws and the issuance of Virtual Asset Service Provider (VASP) licenses to local exchanges.
In response to the foreign exchange clampdown, Binance has announced it will no longer support Nigerian Naira (NGN) services on its platform. All spot trading pairs involving the naira will be delisted within two days, including BTC/NGN and USDT/NGN. Users have been advised to withdraw their naira balances before March 8th, or risk conversion to USDT at a rate of 1 USDT for 1,515.3 Naira.
The foreign exchange regulations have forced Binance to adjust its services, impacting its P2P trading service and ending support for the Nigerian naira. However, Nigerian users can continue to use the platform for trading other currencies and assets, but they cannot add or withdraw naira.
This cautious but engaged stance by the Nigerian government marks its efforts to balance innovation with financial sovereignty and investor protection concerns amid the ongoing legal and regulatory pressures on Binance. Users will have to transfer their assets to other services that support naira on- and off-ramping.
Despite the restrictions, the Nigerian government's stance on blockchain technology and digital assets remains positive, with a focus on regulation rather than prohibition. The ongoing legal disputes and regulatory actions serve as a reminder of the complexities involved in navigating the intersection of traditional finance and cryptocurrency.
- The Nigerian government's ongoing legal disputes with Binance, despite not registering in the country, highlight their argument that Binance has a "significant economic presence" and is thus liable for corporation tax.
- Despite the restrictive measures against Binance, the Nigerian government continues to uphold a positive outlook on blockchain technology and digital assets, aiming to regulate rather than prohibit them.
- Following the foreign exchange clampdown, Binance has ended its support for the Nigerian naira, delisting all spot trading pairs involving the naira, including BTC/NGN and USDT/NGN.
- As a result of Binance's Naira services suspension, users can no longer add or withdraw naira from the platform, but they can continue trading other currencies and assets.
