In a recent press release addressing its Nigerian customers, major crypto exchange Binance distanced itself from the rumored currency speculation that is putting downward pressure on the already weak naira.
The development comes amid reports of the cryptocurrency exchange earlier placing a cap on USDT sales on its peer-to-peer (P2P) marketplace.
Binance traders in Nigeria on Tuesday, Feb. 20, complained that they were unable to buy or sell USDT on the crypto exchange platform, with reports stating that the firm placed a cap of 1802 NGN to $1 for traders who wanted to sell their USDT.
The price limit caused traders to seek other platforms that were selling above the quoted price on Binance.
The exchange’s restrictions were rumored to be a result of a directive from the Central Bank of Nigeria (CBN) and other government agencies, who ordered the platform to put a cap on USDT selling.
Speaking on the matter, Binance, in a statement on Feb. 21, said it had to make some adjustments to enable continuous trading.
“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.”
Binance, however, added that it was not responsible for fixing forex rates.
“It is important to note that foreign exchange rates are influenced by various complex factors, which Binance has no influence on.”
Binance P2P is under the microscope amid the worsening naira crisis. The Nigerian currency has been experiencing a decline against major currencies such as the dollar and Great British Pound (GBP), with the former trading at over 1700 NGN and the latter above 2000 NGN on the parallel market.
Meanwhile, Binance also stated that it is “working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance.”
With the steady fall of the naira, perceived political policies might be looking for a scapegoat to lay the blame on the currency’s devaluation, and crypto seems to come in handy.
The CBN, Nigeria’s apex bank, which previously banned banks from servicing crypto-related accounts, changed its stance in December 2023 when it lifted the ban.
According to the central bank, financial institutions were allowed to open accounts for virtual asset service providers (VASPs) but were still prohibited from holding or transacting cryptocurrencies.