Crypto trading platform, Binance, has confirmed that it has limited trading on the Nigerian currency for the USDT, a stablecoin pegged against the US dollar, to address what it described as unusual currency movement.
While many Nigerians have been facing restrictions with buying and selling USDT on the platform since Tuesday, Binance said its action was “to protect users and prevent any abuse.
- ”The company also distances itself from the forex debacle in Nigeria saying its platform is “market-driven and not intended to be a proxy for currency pricing in Nigeria.”
This development comes amidst unconfirmed reports that the Central Bank of Nigeria (CBN), in conjunction with other government agencies had allegedly ordered Binance to set a cap on Nigerian traders selling USDT.
The Nigerian naira has been on a steady decline against several other currencies with the British Pounds now trading at over N2,000.
On Tuesday, Nairametrics reported that the official exchange rate settled at N1551.24/$1 as the P2P market crossed N1800/$.
What Binance is saying
While assuring its Nigerian users that their funds are safe and secure, Binance in a blog post published on Wednesday, said its peer-to-peer (P2P) product remains operational but with adjustments.
- “To protect users, and to prevent any abuse, our system automatically pauses in the event of a period of significant currency movement. Late last night, we observed a temporary suppression of prices that briefly reached our system limit. We quickly made the necessary adjustments to allow trading to continue.
- “We have stringent measures in place to protect users in the market, including real-time monitoring, immediate removal of non-compliant advertisements, and permanent removal of bad actors from using our P2P product. Continuous market surveillance ensures the prompt removal of abnormal prices, supported by a fixed security deposit,” it said.
Collaboration with regulators
While this is not specific to Nigeria, Binance said it is working with regulators and policymakers to maintain transparency in cryptocurrency trading and its impacts on the financial markets. It emphasized that Binance does not influence foreign exchange rates.
- “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.
- “Again, we encourage users and the community to disregard any unfounded fears or uncertainties and appreciate the ongoing support as we navigate the dynamic market conditions. We will continue to provide updates through our official channels, as necessary,” it said.
