Binance Adjusts Peg to ₦1892/$, Denies Allegations of Conniving with Govt.

Binance has countered allegations of succumbing to the Nigerian government’s foreign exchange control desires. On the evening of Wednesday, February 21, 2024, the platform resumed P2P operations, adjusting the maximum selling cap of USDT from the debated ₦1802/USDT to ₦1892/USDT.

As earlier reported, due to alleged pressure from the Tinubu-led administration, Binance restricted Nigerians from peer-to-peer (P2P) dollar-naira trade on its platform.

This measure, on Tuesday, temporarily paused the trading platform’s P2P operations and restricted traders from posting new offers above a specific price. The price of USDT was restricted to 1,802 naira per unit, with sellers who attempted to sell above that value being specified.

The unprecedented development provoked many Nigerians and led to an outrage on social media platform X. Netizens pointed out the demerits of centralised cryptocurrency exchanges, alleging that the Nigerian government and the Central Bank of Nigeria have compromised Binance.

As if to confirm the speculation, the trading platform published an announcement saying that they were “working hand in hand with local authorities, lawmakers, and regulators to ensure they act on non-compliance”.

Lamenting, an X user said:

“If this is how they plan to save the naira, I’m sorry but it’s going to fail woefully. Binance was only a medium. If you block Binance, people will find new ways. This whole policy is absolutely ridiculous. Naira is going to zero.”

True to those words, Nigerian Binance users diverted in their numbers to other exchange platforms such as Kucoin and OKC, further driving the exchange rate to over ₦2000/USDT.

BINANCE RESPONDS TO ALLEGATIONS

In the heat of the outrage, Binance resumed P2P trade on its platform in the evening of Wednesday, February 21, 2024. The maximum selling cap of USDT was adjusted from ₦1802/USDT to a debatable ₦1892/USDT.

Binance refuted the biting allegations in a memo titled “Securing Trust: Binance Affirms User Funds and Operational Integrity Amid Market Dynamics in Nigeria”.

In the memo, the popular crypto exchange explained that the P2P price peg resulted from an “automatic system pause” triggered during periods of significant currency movement. The exchange clarified that the temporary suppression of prices is accompanied by necessary adjustments to enable continued trading.

The statement read in part:

“Don’t 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. Binance provides a P2P marketplace, not as a price discovery platform. To be clear: it is market-driven and is not intended to be a proxy for currency pricing in Nigeria.

To protect users, and to prevent any abuse, our 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.

We have stringent measures in place to protect users in the market, including real-time monitoring, immediate removal of non-compliant advertisements, and permanent removal of bad actors from using our P2P product.”

Binance further mentioned that their continuous market surveillance ensures the prompt removal of abnormal prices, supported by a fixed security deposit.

“It is important to note that foreign exchange rates are influenced by various complex factors, which Binance does not influence on”, the memo read, “However, we continue 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.

We remain dedicated to providing users with market-driven, fraud-free, and manipulation-free products. We take our responsibility to protect users and their confidential data very seriously.‌

“Again, we encourage users and the community to disregard any unfounded fears or uncertainties and appreciate the ongoing support as we navigate the dynamic market conditions. We will continue to provide updates through our official channels, as necessary.”

While opinions are divided on the innocence of the giant trading platform, one thing is sure: Tuesday’s events will significantly affect Binance as Nigeria is amongst its top clientele base.

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