Binance Nigeria Imposes USDT Selling Cap on P2P Platform Amid Regulatory Compliance Push
Summary:
Binance Nigeria imposes a selling cap of 1,802 naira per USDT on its P2P platform to comply with local authorities. This rule has led to the suspension of numerous trader accounts, pushing them to explore other P2P platforms. In a bid to tackle economic instability, the Nigerian National Security Adviser's Office has teamed up with the Central Bank of Nigeria to combat forex speculation. Additionally, the Nigerian Securities and Exchange Commission issued a warning to local investors in 2023 about Binance's lack of a local operating license.
In an effort to remain compliant with local authorities, Binance Nigeria has imposed a selling price limit for USDT tokens on its Peer-to-Peer (P2P) platform. The cap, standing at 1,802 naira per USDT, restricts sellers on the Binance platform from transacting above this limit. In a commitment to cooperate with local lawmakers, regulators and authorities, Binance has ensured strict adherence to this cap. Binance's P2P platform operates by enabling direct cryptocurrency transactions for fiat currency between users. Traders attempting to breach the set price cap have faced account suspension, causing them to switch to other exchanges offering P2P options.
In an effort to tackle economic instability and curb forex speculation, a collaborative approach has been opted by the Nigerian National Security Adviser's Office and the Central Bank of Nigeria (CBN). They have identified speculator activity, both within and outside of Nigeria, as a significant influence on the naira's depreciation. This has further caused inflation and negatively impacted the country's economic stability.
The government-led unification of forex windows in mid-2023 resulted in a drastic fall of naira value, Nigeria's local currency, against the dollar in the foreign exchange rate market. The rate skyrocketed from roughly N700/$1 and rose to a record high of over N1,500/$1.
Binance received a warning from the Nigerian Securities and Exchange Commission (SEC) in July 2023. The commission stated that Binance lacked a license for operations in Nigeria, rendering its activities illegal. In this vein, the SEC reminded the public about the high risk and potential for possible total investment loss.
Nigeria currently boasts the world's largest P2P market after the Central Bank of Nigeria prohibited institutions from cryptocurrency transactions in 2021. However, the ban was lifted in December 2023, with a circular permitting Nigerian banks to facilitate cryptocurrency transactions.
For Nigerians trading in foreign exchange, traditional banking and Bureau de Change (BDC) channels impose significant difficulty leaving P2P transfers as a more appealing option due to the lower transfer fees in the crypto market compared to the banking system.
Published At
2/21/2024 11:07:20 AM
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