Crypto Exchanges Halt USDT/USDC Sales in Naira Amid Regulatory Pressure

Several crypto companies in Nigeria have decided to stop allowing users to buy the USDT and USDC stablecoins using the local currency, Naira.

This comes after a recent meeting of crypto founders where a number of them agreed to suspend trading on their platforms.

The Central Bank of Nigeria (CBN) has increased its scrutiny on these exchanges, leading to this drastic change in policy.

According to a source present at the meeting, the decision was made to protect users and the exchanges themselves from potential regulatory issues.

While some crypto industry players have confirmed the meeting, they have declined to share further details.

At least two Nigerian crypto exchanges have informed their customers about the new development.

One exchange sent a notification to its users stating, “We are suspending the buying and selling of USDT and USDC for Naira.

This means you can’t buy or sell USDT or USDC with Naira.” This sudden change in policy has left many crypto enthusiasts in Nigeria puzzled and concerned.

The move comes as major exchanges like Binance, Coinbase, and Quidax find themselves in regulatory crosshairs.

Regulators believe that crypto platforms may encourage speculators to manipulate exchange rates.

As a result, users have been unable to access these websites this week.

The increased volatility in Nigeria’s foreign exchange (FX) market has led to several policy actions, with the Central Bank governor, Olayemi Cardoso, claiming that “$26 billion has passed through Binance Nigeria from sources and users we cannot identify.

” An autonomous group, the Digital Currency Coalition, has also claimed that speculative trading on the Binance peer-to-peer offering significantly contributed to the “113.1% devaluation of the naira against USDT” since February 2023.

Unconfirmed reports suggest that two executives at a crypto company were arrested on Tuesday in an attempt to force the company to share its Know Your Customer (KYC) data.

A special adviser to Nigeria’s National Security Adviser, Malam Nuhu Ribadu, said he was unaware of any arrests but suggested that law enforcement agencies might have been involved.

Crypto exchanges are now treading cautiously, with three industry insiders telling TechCabal that they have been advised not to wear Binance-branded clothing or attend related events for the time being.

This level of uncertainty and fear is reminiscent of last year when the Securities Exchange Commission declared that Binance was operating illegally in the country.

As a result of the regulatory pressure, at least five leading crypto figures have declined to comment on this story, citing concerns about potential repercussions.

An early-stage crypto investor in Nigeria told TechCabal that the situation is reminiscent of the EndSARS protests in 2020 and that they have been warned by peers to avoid attracting attention from law enforcement.

The future of crypto trading in Nigeria remains uncertain as the country grapples with regulatory challenges and the potential impact on its economy.