Crypto companies address Nigeria’s crypto clampdown

credit: Shutterstock
credit: Shutterstock

Following multiple reports of Nigeria blocking access to some of the largest cryptocurrency exchanges, those in question have addressed concerns. 

Last Wednesday, local Nigerian outlets reported that exchanges such as Binance, Coinbase and Kraken had accessibility to their user base in the country blocked with speculation of further penalties looming. 

The reason behind the crypto exchange block was mainly due to the plummeting in value against the US dollar of the Nigerian national currency, the Naira, with the Nigerian government believing crypto exchanges in the country were “blatantly setting exchange rates for Nigeria”, according to Bayo Onanuga, an advisor to President Bola Tinubu

This has led to Binance imposing peer-to-peer transaction limits in the country, with the payment method having served as a hedge against the Naira, which led to suspicions that cryptocurrencies circulated by the exchanges were fuelling the national currencies devaluation. 

Despite Binance users in Nigeria expressing difficulties accessing the exchange on Thursday, the world’s largest crypto exchange assured that, whilst it has been experiencing issues in Nigeria, it confirmed that it is still accessible in the country. 

A Binance statement read: “We are aware that some users are experiencing issues accessing, along with other platforms in the industry. Only users attempting to access the website are impacted, although the app is currently available.”

Coinbase issued a similar sentiment to Binance, refuting reported claims that its services had been suspended in the country. 

“We are continuing to investigate these reports, but based on an initial investigation, it appears that remains accessible from Nigeria,” a Coinbase spokesperson said. 

This has not been Nigeria’s first controversy regarding crypto and companies operating within the country. In July 2023, the Nigerian Securities and Exchange Commission issued a warning to investors that Binance does not have regulatory clearance by them to operate in the country and is therefore illegal. 

The country’s central bank and financial regulators are seeking to halt the escalation of the Naira by stamping out inflated foreign exchange rates attributed to localised exchanges, such as crypto one’s operating in the country. 

It remains unclear what the devaluation of Nigeria’s national currency means for its plans for the eNaira, the country’s central bank digital currency (CBDC). Adoption rates for the digital currency initially suffered but the central bank is adamant its position will not cause instability to its financial system.