Nigerians are running out of trading options after Binance issued its unaffiliated Nigerian namesake a cease and desist order.
Binance CEO Changpeng Zhao called Binance Nigeria Limited a “scam” operation.
Nigerians Run Out of Options and Lose Crypto Lifeline
The global Binance exchange may have fallen victim to a tactic known as domain squatting, where a bogus company uses an established brand to set up a local operation.
The legitimate firm can buy the domain if it establishes itself in the region. Earlier this month, Nigerian authorities ordered the entity to stop operating without regulation or registration.
The closing of Binance Nigeria Limited will see citizens lose a vital crypto lifeline. Nigerians adopted crypto after falling victim to distorted central bank monetary policy.
In 2020, Nigeria was the second-largest Bitcoin market for peer-to-peer exchange Paxful before regulatory hurdles forced the exchange to shutter operations.
P2P exchanges offer users a marketplace to exchange crypto without a central order matching system that firms like Coinbase use. Paxful had 11 million users before its closure.
In addition to offering a crypto lifeline, Paxful offered a vital remittance alternative to citizens burdened by legacy fees.
The nation’s central bank recently relaxed earlier restrictions preventing banks from doing business with crypto firms. Nigeria’s securities regulator will reportedly finalize crypto exchange regulations in an upcoming Finance bill.
Nigeria’s central bank recently confirmed that local banks could determine dollar exchange rates instead of the central bank.
Global Regulators Squeeze Trading Volumes
An exit of Binance Nigeria could boost volumes at the Binance global exchange after regulators in several wealthy nations ejected the company through increased compliance burdens.
Learn about the best crypto exchanges for beginners here.
While Binance is still dominating volumes, its trading activity has fallen from 70% last year to around 50% in early June. This decline came after the exchange exited several key jurisdictions, including the Netherlands and Canada.
It is also under scrutiny from US regulators, who accuse Binance of deceiving regulators through an opaque corporate structure.
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