Nigeria has intensified its scrutiny of major cryptocurrency exchanges, including Binance and Coinbase, to combat financial crimes associated with digital assets. The country’s telecommunications companies have been ordered to restrict access to these crypto firms’ websites following guidelines issued by the Central Bank of Nigeria (CBN).
Binance and Coinbase Restrictions
In December 2023, the Central Bank of Nigeria reversed its stance on crypto transactions, instructing banks to disregard the previous ban imposed in February 2021. However, the latest restriction on crypto websites aims to curb currency speculation activities within the country.
Binance clarified that its platform is not intended for currency pricing after users complained about difficulties in purchasing dollars. The exchange emphasized its commitment to working with authorities and regulators to ensure compliance.
The Nigerian Communications Commission (NCC) has directed telecom firms to block access to Binance and other cryptocurrency websites. The restriction is expected to take effect immediately, similar to the blocking of Twitter in 2021.
Nigerian Regulators Escalate Crypto Crackdown
The government’s decision to potentially block crypto platforms like Binance aims to curb alleged manipulation of the foreign exchange market. Before the restriction, the spot rate on Binance for the Nigerian Naira was approximately N1,850 (around $1.16).
Nigerians may find alternative ways to access these platforms, such as using Virtual Private Network (VPN) apps. Nigeria has one of the largest crypto populations globally, with a reported transaction volume of $56.7 billion between July 2022 and June 2023.
Criticisms and Concerns
Chimezie Chuta, founder of Blockchain Nigeria User Group, criticized the government’s approach, stating that restricting access to crypto platforms won’t solve the underlying issues with the country’s currency. He believes that social media and peer-to-peer exchanges can fill the gap created by these restrictions and warns that such measures may exacerbate the situation.
As regulatory pressure on crypto exchanges in Nigeria intensifies, the crypto community awaits further developments and potential responses from Binance, Coinbase, and other affected platforms. The government’s efforts to crack down on crypto transactions and currency speculation continue to shape Nigeria’s digital asset industry landscape.
