Binance Bails Out of Nigeria Amid Legal Turmoil
The world’s largest crypto exchange, Binance, has announced that it will cease all operations in Nigeria, the biggest market for cryptocurrencies in Africa. The move comes after a series of legal challenges from the Nigerian government, which accuses Binance of facilitating illicit financial flows and currency manipulation.
Binance said in a blog post on Tuesday that it will stop supporting deposits and withdrawals of the Nigerian naira (NGN) by Friday, March 8. Any remaining NGN balances in user accounts will be automatically converted to Tether (USDT), a stablecoin pegged to the U.S. dollar.
The exchange also urged its Nigerian users to withdraw their funds, trade their NGN assets, or convert them to crypto before the deadline. Binance did not provide any explanation for its decision, but said it was “committed to providing secure and compliant platforms to our users across the globe.”
Binance’s exit from Nigeria is a major blow to the crypto industry in the country, which has seen a surge in adoption and innovation in recent years. Nigeria is the second-largest market for peer-to-peer crypto trading in the world, according to data from UsefulTulips. Nigerians have turned to cryptocurrencies as a hedge against inflation, currency devaluation, and capital controls.
However, the Nigerian authorities have been cracking down on the crypto sector, citing concerns over money laundering, terrorism financing, and exchange rate stability. In February, the Central Bank of Nigeria (CBN) ordered banks to close accounts of crypto-related businesses and individuals, effectively banning crypto transactions in the country.
CBN also claimed that Binance had enabled $26 billion of untraceable funds to leave the country in the past year, as it faces a foreign exchange crisis and soaring inflation. The CBN demanded $10 billion from Binance as compensation, according to a BBC report.
The Nigerian parliament also launched an investigation into Binance’s activities, and summoned its CEO, Richard Teng, to appear before a committee on financial crimes by March 4. The committee’s chairman, Ginger Onwusibe, said the committee would take appropriate measures if Teng failed to show up, the Punch reported.
Last week, two Binance executives were reportedly detained by the Nigerian authorities, following allegations of currency manipulation, tax evasion, and illegal operations. The executives were not charged, but Bloomberg reported that they could face prosecution.
Binance has not commented on the legal issues it faces in Nigeria, but said it would continue to monitor the situation and provide updates to its users. The exchange also said it would “work with regulators and policymakers to unlock the full potential of cryptocurrencies in Nigeria and beyond.”
