- Binance USDT price cap in Nigeria has sparked outrage among the local crypto community.
- Several users have called for a boycott of the exchange.
- The exchange issued a statement addressing user concerns.
Binance, the world’s largest crypto exchange, has navigated severe regulatory hurdles over the past year, stemming from sanctions from global financial authorities. This has resulted in the exchange taking extra cautionary measures in its operations to aid compliance with regulatory standards in various regions.
In its latest effort in line with this, Binance established a price cap on the USDT trading rate to Naira, sparking an outrage among local investors.
Binance Sets USDT Price Cap for Naira
On Tuesday, February 20, Binance set a price cap on its USDT to Naira P2P selling price, restricting users to sell at 1,892 NGN.
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The move, which blocked many traders from facilitating transactions above the pegged rate, came amid the ongoing stability troubles for Nigeria’s naira, which has continued to dip against foreign currencies like the USD and GBP.
Citing efforts to comply with local regulatory standards in Nigeria, Binance stated that the exchange is “working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance.”
However, the exchange’s move displeased several investors, stirring a ruckus among the local crypto community.
Community Response
Several users have taken to social media platform X(formerly Twitter) to share their grievances, indicating their readiness to boycott the exchange if the restrictions persist.
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X user Brother Bernard emphasized that the NGN1,892 to USDT price cap set by Binance is a recipe for disaster, which may potentially trigger its fallout from the Nigeria crypto scene.
Despite Binance’s efforts to calm the situation by faulting an automatic “system limit” due to significant currency movement, users are unconvinced, asserting that the exchange is collaborating with the Nigerian government to oppress investors.
As a result, most investors have redirected their transactions to other platforms that allow trading and exchange services without restrictions, encouraging others to do the same.
On the Flipside
- The Nigerian SEC issued a regulatory warning against Binance in July 2023.
- Some users have reported that the P2P rates are back to functioning properly.
- Despite the calls for the boycott of the exchange in light of the concerns, Binance has not seen any significant asset withdrawals by investors.
Why This Matters
Nigeria boasts the world’s largest peer-to-peer exchange volume on Binance, and restrictions like this could significantly impact many investors. Additionally, if investors divert transactions from Binance to other exchange platforms, it could result in a significant loss of business.
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