Just in: FG Allegedly Restricts Crypto Exchange Platforms in Nigeria

The Federal Government of Nigeria have allegedly banned cryptocurrency platforms, including Binance, OctaFX, Coinbase, and others, to revive the naira and tackle currency speculation.

While the debate surrounding Binance’s influence on the Naira remains a contentious issue, a recent report from PREMIUM TIMES suggests an imminent restriction on cryptocurrency transactions in Nigeria.

The media outlet reported that the Nigerian government had blocked online platforms, including Binance, OctaFX, Coinbase, and others, to curb what it perceived as manipulating the forex market and illicit fund movements.

The Nigerian Communications Commission (NCC) reportedly communicated this directive to telecommunication companies, who have begun implementing it.

Authorities cited concerns about criminal activities, currency speculators, and money launderers exploiting these platforms, contributing to the weakening of the national currency, the naira.

Away from recent accusations of meddling with Binance, there was a wild rumour in 2023 that the Central Bank of Nigeria resorted to trading on Binance to drive the USDT\NGN rate lower.

In November 2023, USDT plummeted over 30% against the Nigerian naira (NGN) on Binance, a trend believed by some to be linked to the CBN’s potential intervention. The belief stemmed from the speculation that the CBN is clearing its forex backlog with three major banks—Citibank, Stanbic IBTC, and Standard Chartered Bank.

Reports indicated that the CBN had successfully settled debts amounting to $6.7 billion with these banks, which resulted in the strengthening of the naira. The naira had appreciated to N1,120 against the dollar, marking a 4.27% gain from its previous rate of N1,170.

The simultaneous decline of the USDT against the naira on Binance had raised eyebrows, with some community members speculating that the CBN might be involved in trading on the P2P platform to drive the USDT rate further down.

Changpeng Zhao, the co-founder of Binance, posted an emoji of the Nigeria flag on Twitter, adding an air of uncertainty to the ongoing situation.

Previous Ban on Cryptocurrency in Nigeria 

Recall that in 2021, President Muhammad Buhari placed a ban on cryptocurrency trading, which was later lifted in December 2023 under the current administration.

The cryptocurrency ban had merely increased the number of crypto enthusiasts in Nigeria- it did nothing to strengthen the naira, which is now on a dramatic decline, officially hitting a new low of ₦1800/USD on Monday. Recent regulations to revive the Nigerian foreign exchange market have further depreciated the currency. The most recent on the list is an imminent ban on cryptocurrency transactions and exchange platforms.

The desperate quest to revitalise the naira from its dramatic free fall seems to have hitched Nigeria onto a tumultuous ride.

This story is developing….

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