Nigeria has asked its telecommunications firms to restrict access to the websites of cryptocurrency firms such as Binance, OctaFX, Coinbase and others, months after its Central Bank issued a guideline to govern digital asset operators’ activities.
In December 2023, the Central Bank of Nigeria changed its stance on crypto assets and asked banks to disregard its February 2021 ban on crypto transactions.
This new restriction on crypto websites is aimed at slowing currency speculation activities in the country, with Binance stating that its platform is not for currency pricing. The platform said this after users complained about their inability to buy dollars.
One user on X, @MikaelCBernard, tweeted, “There’s no more dollars available on Binance oh. It is like Binance traders have gone on strike. You can only sell, but you can’t buy.”
While noting its commitment to a market-driven, fraud-free, and manipulation-free platform for its users, Binance said, “Furthermore, as industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance.”
Later on Wednesday, the firm confirmed that it paused transactions to protect users from price suppression. Addressing rumours that currency speculation was thriving on its platform, the firm said, “It is important to note that foreign exchange rates are influenced by various complex factors, which Binance has no influence on.
“However, we continue to actively engage with regulators, policymakers and other relevant stakeholders to foster an open, transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.”
However, in a move that began as a rumour, the Nigerian Communications Commission has asked telecom firms to block access to the websites of Binance and other cryptocurrency firms.
According to a top source in the telecoms industry, telcos got a directive from the commission today. The restriction is to take effect immediately, the source added. There is no timeline yet for this restriction. When Nigeria blocked access to Twitter in 2021, it asked telcos to restrict access to the platform.
Earlier in the day, reports surfaced that the government may block the online platforms of Binance and other crypto firms to prevent the continued manipulation of the foreign exchange market. Before it was blocked, the spot rate on Binance was around N1,850/$.
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The government has adopted many measures to stop the fall. Recently, it asked its Economic and Financial Crimes Commission to arrest Bureau de Change operators for speculative activities.
Reuben Mouka, the Director of Public Affairs at the NCC, stated that he is unaware of any directive from the NCC to telcos. “I am not aware of such information. And this might be because it is the soft side of the regulation of ICT.
“The fact that the NCC is involved in the infrastructure side of ICT does not mean the regulation of websites and social media is in our purview,” he said.
Nigerians are lamenting this new move from the government. Taking to the X (formerly Twitter), many have started complaining about the Binance website not going through. Checks by BusinessDay (using the MTN network) confirmed this, too.
A tweet by Adebayo Juwon, co-founder at Finna Protocol, a multi-utility ecosystem for Stablecoins, on X, said, “Just got word that CBN has requested MTN to start blocking all crypto sites. While it may not happen instantly due to approval processes, it looks like it is on the horizon.”
@unicodeveloper tweeted, “In 2024, you are blaming Binance for FX issues of a country of 200 million people and a 2023 budget of $34 billion.”
@eldivyn tweeted sarcastically, “It is the $2 million being spent on Binance that is driving down the price of dollars… Person dey drive motor, but na who dey trek dey match brake.”
@Anthony Azekwoh added, “Binance is not the problem, Naira rate is not the problem – there are deep systemic problems that haven’t been addressed that every economist alive has been pointing to for the past 8 years.”
When Nigeria banned Twitter in 2021, Nigerians continued using the platform with Virtual Private Network apps. The same is expected, with the country boasting one of the largest crypto populations in the world. In 2023, Chainalysis, a blockchain platform, disclosed that the country’s crypto transaction volume was $56.7 billion between July 2022 and June 2023.
“The government is focusing on the wrong thing in their effort to tackle the naira’s issue. This won’t be sustainable because there are so many other ways to exchange crypto. Social media can fill this Peer to Peer gap. This will only worsen the situation,” Chimezie Chuta, founder and coordinator of Blockchain Nigeria User Group, told BusinessDay.
Credit: Business Day