Binance Shuts Down P2P in Nigeria Following Clash With Federal Government

It was reported yesterday that the Nigerian government detained two Binance crypto exchange platform executives. The arrest was made after the two officials of the largest crypto exchange platform arrived in Nigeria to negotiate reforms to stabilise the naira with the government. 

According to sources, it was known that the two executives arrived in Nigeria on Sunday to discuss the crackdown on the Binance platform with the government.

However, on Monday afternoon, it was reported that the executives met with top cyber security officials and other investigators from the National Security Adviser office to discuss ways to address the recent issues. Still, the meeting ended deadlocked as Binance officials declined some of the demands put forward by the Nigerian government.

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The platform was also accused of operating a business worth billions with a full licence and documentation.

Sources stated that the government requested that Binance executives provide data on transactions involving the Nigerian naira (NGN) on the Binance platform in the last seven years. They were also requested to delete some of the Nigerian data to be deleted from the Binance platform.

Although it was reported, the Binance executives insisted they should be taken to their respective countries' embassies before they could comply.

However, the identities of the detained Binance officials still need to be confirmed. Still, according to some research, it was reported that one was an American, and the other was a British-Pakistani.

The Nigerian government also obtained a court warrant to detain the officials for at least twelve days in the first instance.

It was reported that the investigation was taken over by the Economic and Financial Crimes Commission (EFCC). At the same time, the two executives were detained at a guest house near the Office of the National Security Adviser.

Meanwhile, indications emerged Wednesday that Binance disabled its platform's peer-to-peer function for Nigerian users.

Binance P2P allows users, buyers, and sellers to trade without third-party interference, and it became even more popular among Nigerians when the previous administration of former President Muhammadu Buhari banned cryptocurrency in 2021.

By disabling the P2P platform for Nigerian users, it's still unclear if Nigerians could still trade on the Binance platform.

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Back Story

On Tuesday, the Central Bank of Nigeria stated that based on their investigations, $26 billion flowed through Binance Nigeria over the past year from "unidentified sources."

"In the case of Binance, in the last year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify," Olayemi Cardoso, the CBN governor, said.

The apex bank governor also hinted that there is a collaboration among government agencies such as the Securities and Exchange Commission (SEC), the Economic and Financial Crimes Commission (EFCC), the Police, and the Office of the National Security Adviser (NSA) to address such illicit financial activities.

Also, last week, it was reported how the Nigerian government blocked the online platforms of Binance and other crypto firms to halt what it described as continuous manipulation of the forex market and illicit movement of funds.

Apart from Binance, other cryptocurrency platforms such as Forextime, OctaFX, Crypto, FXTM, Coinbase, and Kraken, among others, were equally blocked.

In September 2023, Nigeria's Securities and Exchange Commission (SEC) disclaimed Binance Nigeria Limited, saying the platform was "neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal."