In a surprising turn of events, Nigeria’s presidential adviser on Information and Strategy, Bayo Onanuga, has publicly called for a ban on major cryptocurrency trading platforms, including Binance and KuCoin, citing allegations of currency manipulation. The adviser expressed concerns over the impact of these platforms on the value of the Nigerian currency in the foreign exchange (forex) market, prompting speculation about a potential government crackdown.

Onanuga took to social media to voice his concerns, specifically accusing users trading on the Binance platform of being unpatriotic. He claimed that these platforms play a role in the ongoing decline of the Nigerian naira in the forex market. The presidential adviser’s comments come at a time when there are already rumors circulating about the government considering a ban on cryptocurrency trading.

In a post titled “The Naira-Dollar Manipulators,” Onanuga called upon the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to swiftly intervene and halt the operations of cryptocurrency exchanges in the country. He stated, “Crypto should be banned in our country, or else this bleeding of our currency will continue unabated.”

The adviser specifically targeted Binance, a leading cryptocurrency exchange currently facing regulatory scrutiny in several countries. Onanuga criticized Binance for allegedly setting exchange rates for Nigeria and questioned its authority to determine the value of the Naira on its crypto exchange platform. He highlighted that Binance faces access limitations in various jurisdictions, including the U.S., Singapore, Canada, and the U.K.

Responding to the allegations, Binance issued a statement on February 22, distancing itself from the forex crisis in Nigeria. The exchange emphasized that its platform is “market-driven” and clarified that it is not intended to serve as a proxy for currency pricing in Nigeria.

Nigeria’s cryptocurrency landscape has been marked by regulatory uncertainty and policy shifts in recent years. Following the Central Bank of Nigeria’s ban on financial institutions from dealing in cryptocurrency in 2021, the country witnessed a surge in peer-to-peer (P2P) trading, making it the largest P2P market globally.

However, a circular issued in December 2023 lifted the ban on Nigerian banks facilitating cryptocurrency transactions, signaling a potential shift in the government’s approach to digital assets. Despite this regulatory change, the debate over the role of cryptocurrency exchanges and their impact on the national economy persists.

The proposed ban on cryptocurrency trading platforms raises significant questions about the future of digital assets in Nigeria and their integration into the global financial system. While advocates argue for greater regulatory oversight to protect investors and stabilize the currency, others caution against stifling innovation and limiting access to financial opportunities.

Contrary to local speculation within the crypto community, Binance recently set a limit on the selling price of Tether (USDT) tokens on its peer-to-peer (P2P) platform. Traders were unable to sell USDT above a 1,802 naira per USDT cap. Binance explained that the price peg was a result of an automatic system pause, refuting any connection to the alleged currency manipulation.

Nigeria currently holds the position of the world’s largest peer-to-peer (P2P) market for cryptocurrency trading. This prominence emerged after the Central Bank of Nigeria imposed a ban on financial institutions engaging in crypto transactions in 2021. However, a circular issued to banks in December 2023 lifted the ban, allowing Nigerian banks to facilitate cryptocurrency transactions.

As the government contemplates its stance on cryptocurrency trading, concerns about financial crimes and the potential impact on the national currency remain at the forefront. The cryptocurrency community in Nigeria is closely watching the developments, uncertain about the future of their activities in the rapidly evolving regulatory landscape.