Complex factors, not us, influencing FX rates in Nigeria, says Binance

Binance Nigeria, a cryptocurrency exchange company, has reacted to reports alleging price manipulation in foreign exchange (FX) rates on its platform.

In a statement on its website on Wednesday, Binance said its firm does not operate as a price discovery platform and FX rates are determined by complex forces that have nothing to do with the company.

Binance’s statement is coming amidst reports the Nigerian government plans to block crypto firms from operating in Nigeria due to activities allegedly manipulating FX rates on their platforms.

The trading company said it provides a market-driven peer-to-peer (P2P) platform that is not meant to be a proxy for currency pricing in Nigeria.

“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,” the crypto firm said.

“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.”

Binance also said its users’ funds are secure and the company’s P2P product remains operational.

The firm assured that stringent measures are 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 the P2P product.

“Continuous market surveillance ensures the prompt removal of abnormal prices, supported by a fixed security deposit, “ Binance said.

“It is important to note that foreign exchange rates are influenced by various complex factors, which Binance has no influence on.”

The firm said there would be continuous and active engagement 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,” Binance said.

“Again, we encourage users and the community to disregard any unfounded fears or uncertainties and appreciate the ongoing support as we navigate the dynamic market conditions. We will continue to provide updates through our official channels, as necessary.”

On August 8, 2023, the Association of Bureaux De Change Operators of Nigeria (ABCON) said Binance must be stopped from operating in the country.

The association believes that the firm was one of the many factors putting pressure on the naira.

Also, on February 21, 2024, Bayo Onanuga, special adviser to President Bola Tinubu on information and strategy, said Binance and other crypto platforms should be banned from operating in Nigeria.