Binance deactivates Naira functionality on its peer-to-peer (P2P) market

Binance, a widely used cryptocurrency exchange with over 170 million users worldwide, has disabled its peer-to-peer (P2P) feature for Nigerian users. This P2P market allowed users, buyers, and sellers to transact directly without the intervention of a third party. The feature gained popularity among Nigerians in 2021 after the country’s vibrant crypto industry was outlawed during former President Buhari’s administration.

The swift depreciation of the Nigerian naira, which contributed to inflation reaching an almost three-decade high of 29.9%, prompted the Nigerian government to shift its attention to websites offering cryptocurrency services. Among these, Binance Nigeria received scrutiny due to approximately $26 billion passing through it from “unidentified sources” in the previous year. The Central Bank of Nigeria (CBN) expressed concerns about the lack of adequate identification for these transactions.

In response, the Federal government took action by disabling the websites of Binance and other cryptocurrency companies. Additionally, two senior Binance officials were detained in Nigeria as part of the crackdown on cryptocurrency exchanges. The government demanded information on any transactions involving Nigerian Naira on the Binance platform during the last seven years. Furthermore, they required the removal of other Nigerian-related data from the Binance site.

The Nigerian government believes that cryptocurrency companies facilitate money laundering and currency speculation, contributing to the decline of the naira. Telecom companies were also directed to restrict access to major global bitcoin exchanges, including Binance, Coinbase, and Kraken. Authorities view these platforms as conduits for illegal financial activities.