Binance, the world’s largest crypto exchange by trading volume announced that it will cease all transactions and trading in Nigerian local currency from March 8, amid a nationwide crackdown on cryptocurrency exchanges that authorities have accused of fueling the unofficial market for foreign exchange.

After this Friday, it will no longer allow withdrawals, and any balances in Nigerian Naira will be automatically converted to Tether, a stablecoin with a value based on the US dollar.  The cryptocurrency exchange will stop accepting deposits after 14:00 UTC today, however, it will automatically convert Naira holdings to USDT starting on March 8 at 8:00 a.m. UTC. The support for withdrawals will end on March 8 at 6:00 a.m. UTC. 

An announcement states that the exchange rate for automatic conversions will be 1 USDT for N1,515.13  On March 7 at 3:00 a.m. UTC, all spot trading pairs against the naira will be removed from the market. For these pairings, open-spot orders will be terminated automatically. 

At different times and dates, Binance Convert, Binance P2P, the exchange’s Auto Invest function, and Binance Pay will likewise stop supporting the naira. As part of the crackdown, two senior officials of the crypto exchange were detained by Nigerian federal authorities last week on unspecified allegations.  Peer-to-peer trading on Binance, a popular cryptocurrency exchange with over 170 million users globally, has been at loggerheads with the country’s regulatory environment 

The network, sometimes referred to as the P2P market, enables users, buyers, and sellers to deal without the involvement of a middleman. Following the administration of former President Buhari’s ban on the nation’s thriving cryptocurrency business, it became more and more popular among Nigerians in 2021.  After the naira quickly declined in value, leading to inflation that surged to an almost three-decade high of 29.9%, the FG turned its focus to websites that provided services related to cryptocurrencies. These websites are now a practical means of conducting business and determining the naira’s informal worth. 

Concerns regarding the $26 billion that came through Binance Nigeria from “unidentified sources” the previous year were expressed by the Central Bank of Nigeria. 

According to CBN Chief Olayemi Cardoso, “In the case of Binance, $26 billion has passed through Binance Nigeria in the last year alone from sources and users who we cannot adequately identify.”. To combat such illicit financial operations, the chairman of CBN also recommended that the Securities and Exchange Commission (SEC), the Police, the Office of the National Security Adviser (NSA), and the Economic and Financial Crimes Commission (EFCC) collaborate. 

To stop what it views as ongoing manipulation of the foreign exchange market and unlawful money transfers, the Federal government recently disabled the websites of Binance and other crypto-based companies.