FX crisis in Nigeria: FG moves to blocks Binance,Coinbase, Octafx and other crypto exchanges.

By: Damian Okonkwo

Lagos, Nigeria, February 22, 2024 - In a move that sent shockwaves through the Nigerian financial landscape last week, the Federal Government (FG) reportedly moved to block access to the websites of major cryptocurrency exchanges, including Binance, Kraken, Coinbase, OctaFX, and others. This drastic action comes amidst a deepening foreign exchange (FX) crisis that has seen the naira fall to an all-time low against the US dollar, trading at N1900/$ on Wednesday February 22nd, 2024.

FG Government Cites Market Manipulation and Illicit Activity as the reason for the sudden move

Sources within the major telecommunication companies revealed that the Nigerian Communications Commission (NCC) received and implemented a directive from the presidency and regulatory bodies to restrict access to these crypto platforms. The government's rationale for this move stems from concerns about potential market manipulation and illicit fund movements contributing to the devaluation of the naira.

Authorities cite alleged Crypto Abuse by Speculators and Launderers using the crypto platforms

The Presidency and other regulatory bodies claimed that their decisions stemmed from reports of currency speculators and money launderers exploiting crypto platforms to engage in illegal activities. The belief is that these “criminal activities” are significantly contributing to the weakening of the naira.

Naira's Freefall Sparks Fears and Government Response

The naira had recently reached a record low against the US dollar last week at the parallel market. This has raised deep concern amongst Nigerians over the future of the economy. The unabated freefall of the Naira has led the government to explore various measures to stabilize the currency, including the controversial blocking of crypto exchanges in the country.

Critics Question Effectiveness of the decision and Raise Concerns over Freedom

While the government aims to curb alleged illegal activity and stabilize the forex market, the move has drawn sharp criticisms from many angles. Some critics argue that firstly, the evidence linking crypto platforms to the FX crisis is unsubstantiated and lacks concrete proof. Secondly, they express concerns over the restriction of individual freedom and the potential for hampering financial innovation.

Uncertain Future for Crypto in Nigeria

The long-term implications of the government's decision remain unclear. Whether this is a temporary measure or indicates a more permanent stance against cryptocurrencies in Nigeria is yet to be seen.

The situation is developing rapidly, and further details are expected to emerge in the coming days.