Many Nigerians remember February 2021 as the month the central bank made it illegal for banks to facilitate crypto transactions. It didn’t stop people from trading, but that act sent a strong message that regulators didn’t support crypto. So, when the new Sheriff, Olayemi Cardoso, announced a walkback, it was exciting news. No one knew it was only a calm before the storm.
February 2024 came, and the CBN made Binance, the largest crypto exchange platform, a regulatory target. On February 20th, Binance’s peer-to-peer (P2P) feature had no buy or sell ads for Nigerians. That means no one could buy or sell USDT, the dollar-denominated stablecoin, for naira. By the next day, major crypto exchanges like Binance, Kraken, Coinbase and Quidax had stopped being accessible on major telco networks.
Since then, CBN’s squabble with Binance has only gotten more dramatic. Last week, two of the company’s executives flew into the country seeking to resolve the problem. But the national security adviser had them arrested and their passports seized, according to Financial Times. Then, the government slammed a $10 billion fine on Binance. It felt like a ransom demand. Yet, this hasn’t deterred Nigerians from trading.
According to Chainalysis’ 2023 Geography of Cryptocurrency Report, Nigeria had the highest P2P exchange volume globally. It’s also Africa’s largest crypto economy, receiving the highest cryptocurrency value between 2022 and 2023. Many of these traders have shown that they don’t need permission to trade. So, when Binance came under attack, they moved to instant messaging apps like WhatsApp and Telegram.
“None of these is new to us,” said Joseph*, who has been trading cryptos for the last five years. “Before Binance became popular, most of us were using WhatsApp. It was after they banned crypto that Binance P2p even became a thing.” Joseph is right. Binance added the P2P feature shortly after the CBN circular as an emergency response to keep its Nigerian users on the platform. And the platform quickly earned people’s trust because it protected its users from scams. Binance gave users confidence by offering an escrow service. Soon, other platforms followed suit. According to Joseph, “You’re less likely to get scammed trading P2P on Binance than anywhere else.”
“There is nothing they can do to stop us from trading crypto,” Joseph assured. “If they block one way, people will find another way. I did over $300,000 in transactions in February alone via WhatsApp and Telegram, and one of my friends did about double.”
In September, Telegram launched an in-app crypto wallet to allow users to trade on the platform. It wasn’t surprising since many crypto communities are active on Telegram. After the CBN cracked down on Binance, Nigerians started talking about this wallet on social media. ‘Telegram’ trended on Twitter for the next two days.
The ambush on Binance by Nigerian authorities was one of the drastic measures to save the naira from its freefall. Before Binance, they went after Bureau De Change (BDC) operatives across several states. The CBN believes that both of them have a hand in the manipulation of exchange rates. Cardoso claimed that $26 billion passed through Binance from Nigerians in 2023 alone. However, he didn’t state his source.
“I just wish these guys were more patient,” Joseph said. “I know Binance is controversial in many places, but they are not the reason our naira is falling.”
