The world’s biggest cryptocurrency trading platform Binance, has reiterated its commitment to safeguarding user funds and maintaining operational integrity amidst market dynamics in Nigeria.
This statement is coming following the complaints of Nigerians stating that they are experiencing restrictions from buying and selling Naira to USDT on the platform since Tuesday, also accusing Binance of collaborating with the government to restrict such transactions.
On hearing this, Binance via a blogpost disclosed that its action was mainly to protect users and prevent any abuse. The company also distanced itself from the forex crisis in Nigeria, stating that the platform is market-driven and not intended to be a proxy for currency pricing in Nigeria.
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Binance statement reads,
“Don’t believe the FUD. We would like to assure users that their funds are secure and our peer-to-peer (P2P) product remains operational. Binance provides a P2P marketplace, not as a price discovery platform. To be clear: it is market-driven and is not intended to be a proxy for currency pricing in Nigeria.
“To protect users, and to prevent any abuse, our system automatically pauses in the event of a period of significant currency movement. Late last night, we observed a temporary suppression of prices that briefly reached our system limit. We quickly made the necessary adjustments to allow trading to continue.
“We have stringent measures in place to protect users in the market, including real-time monitoring, immediate removal of non-compliant advertisements, and permanent removal of bad actors from using our P2P product. Continuous market surveillance ensures the prompt removal of abnormal prices, supported by a fixed security deposit. It is important to note that foreign exchange rates are influenced by various complex factors, which Binance does not influence.
“However, we continue to actively engage with regulators, policymakers, and other relevant stakeholders to foster an open transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets. We remain dedicated to providing market-driven, fraud-free, and manipulation-free products for users. We take our responsibility to protect users and their confidential data very seriously.”
It is understood that the Nigerian Naira has been on a steady decline against other foreign currencies, with the British Pounds currently trading at N2,000/£1 and the US dollar at N1,900/$1.
The incessant fall of the naira is fast diminishing the international purchasing power of the currency and consequently buying strength of Nigerian residents. This has spurred a lot of Nigerians to convert their naira into dollars. By converting their naira to dollars, they aim to safeguard the value of their savings and assets, especially those denominated in foreign currency.
Also, converting naira to dollars serves as a hedge against inflation, as the dollar is typically perceived as a more stable and reliable store of value during periods of economic uncertainty.
Overall, the widespread conversion of naira to dollars reflects a loss of confidence in the local currency and underscores the challenges facing Nigeria’s economy. While converting to dollars may provide temporary relief from currency depreciation, addressing the root causes of naira devaluation coupled with forex crisis is very crucial at this moment.