Crypto Exchanges in Nigeria Cease Naira Purchases of USDT and USDC Amid Central Bank Scrutiny: Report
Several crypto companies in Nigeria have made the decision to disallow users from buying the Tether (USDT) and USD Coin (USDC) stablecoins with Naira in light of renewed scrutiny from the Central Bank of Nigeria (CBN).
The move comes as regulators intensify their focus on crypto platforms, citing concerns that they facilitate speculative trading and market manipulation.
The decision was reportedly made during a meeting of crypto founders, where participating individuals agreed to suspend the trading of these stablecoins on their platforms, sources familiar with the matter told TechCabal.
Two Exchanges Ordered to Pause Naira Purchases
While details of the meeting have not been disclosed, it is believed that at least two crypto exchanges have already informed their Nigerian customers about the new development, the report said.
It added that notifications sent to customers explicitly stated that the buying and selling of USDT and USDC with Naira would no longer be possible.
Crypto exchanges have been increasingly facing regulatory scrutiny, with recent reports highlighting difficulties in accessing the websites of popular platforms such as Coinbase, Quidax, and Binance.
The Central Bank governor Olayemi Cardoso has claimed that an estimated $26 billion had passed through Binance Nigeria from unidentified sources and users, further intensifying regulatory concerns.
The Digital Currency Coalition, an autonomous group, also alleged that speculative trading on the platform played a significant role in the devaluation of the Naira against USDT by 113.1% since February 2023.
The situation took a concerning turn when unverified reports emerged suggesting that two executives from a crypto company were arrested, possibly in an attempt to force the company to disclose its Know Your Customer (KYC) data.
However, Zakari Mijinyawa, a special adviser to Nigeria’s National Security Adviser, said he was not aware of any arrests and suggested that law enforcement agencies could have taken action independently.
Amidst these developments, crypto exchanges in Nigeria are proceeding cautiously.
The TechCabal report said some employees have reported receiving instructions not to wear company-branded apparel or attend events related to platforms like Binance.
This climate of uncertainty and fear echoes the sentiments felt last year when the Securities Exchange Commission announced that Binance was operating illegally in the country.
Binance Implements Price Cap for USDT
Binance has recently introduced a price cap for Tether ( USDT) tokens on its peer-to-peer (P2P) platform in Nigeria in order to comply with local regulatory requirements.
Traders on Binance’s P2P platform are currently restricted from selling USDT above the set cap of 1,802 naira per USDT.
As a result of the price cap, accounts belonging to traders attempting to sell USDT above the imposed limit were blocked.
As reported, a recent survey has revealed that Nigeria is the most crypto-savvy nation ahead of the United States and European countries.
Per the survey, Nigeria’s crypto awareness stands at 99% as the country leads in digital asset knowledge and perceived investment drive.
