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FX Crisis: FG Blocks Binance to Curb Naira Depreciation

Efforts to access Binance.com from within Nigeria have hit a roadblock as the Federal Government takes measures to combat the depreciating value of the naira, IgbereTV can confirm.

Findings by our correspondent indicate that attempting to visit the online platform using a Nigerian IP address results in an inaccessible site. However, investigations reveal that utilizing a Virtual Private Network (VPN) connection allows access to Binance, indicating that currently, only VPNs can bypass the restrictions to reach the site.

IgbereTV reports that this move stems from concerns over the continuous manipulation of the forex market and the illicit movement of funds, according to officials knowledgeable about the policy option. The recent drastic weakening of the Nigerian currency has seen the naira plummet to an all-time low of N1,800 to a dollar in the parallel market.

Officials from the presidency and regulatory bodies justify the government’s action against Binance and other crypto firms citing reports of currency speculators and money launderers exploiting these platforms for criminal activities. Authorities assert that these nefarious activities significantly contribute to the devaluation of the naira.

Binance, operating as a digital assets platform, facilitates peer-to-peer transactions, allowing users to advertise their interest in buying or selling currencies of their choice. Despite a disclaimer issued by Nigeria’s Securities and Exchange Commission (SEC) in September 2023, stating that Binance Nigeria Limited operates illegally in the country, the platform continued its operations, attracting substantial patronage, especially among urban youths and suspected speculators and money launderers.

Apart from suspicions of economic sabotage, officials also raise concerns about national security, as these platforms are frequented by criminal groups, including those involved in ransom payments. Law enforcement sources highlight how digital asset platforms are utilized for forex manipulation through fake deals to artificially influence currency values.

A source within the Economic and Financial Crimes Commission (EFCC) described the process as a sophisticated scheme against the Nigerian economy, where manipulators exploit simultaneous buying and selling windows to create fake demand and artificially inflate the value of the dollar against the naira.

A senior executive at the Central Bank of Nigeria (CBN) expressed dismay over the recent downward trend of the naira against the dollar, attributing it to artificial devaluation caused by speculative sites like Binance. He emphasized how Binance’s global reach impacts currency trading, misleadingly devaluing the naira in global markets.

If the government proceeds with a ban on digital asset trading platforms like Binance, it would follow the footsteps of countries such as Malaysia, France, and Malta, among others. The Office of the National Security Adviser (ONSA) has announced collaboration with the Central Bank of Nigeria to crack down on currency speculators and economic saboteurs, signaling a concerted effort to address the crisis.

Despite attempts to reach out to Binance for comments, the platform remained unreachable, leaving unanswered questions about its future operations in Nigeria amidst the government’s crackdown on crypto firms.

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