A coalition of digital exchanges in Nigeria are weighing in on Nigeria’s latest clampdown on crypto by disabling trading pairs that link cryptocurrencies with the naira, amid a call for Binance to be sanctioned by the Nigerian government. The Digital Currency Coalition, which poses as the premier institution for “advancing the adoption and responsible development of digital currencies”, is led by top officials from local exchanges including Quidax, Tradefada, Onboard, Patricia, and the now-defunct Bundle.

The group is leveraging its industry position to drive a union action between local exchanges, which will see them delink the naira from other crypto transactions on their platforms. Naira-linked trading pairs such as USDT/NGN will be disabled, and the trading of digital assets with naira will also be stopped.

Onboard, a self-custody digital wallet, has announced to users that naira will no longer be used to fund usd cards or trade stablecoins from today. “By 7PM (WAT) today, we're suspending the buying and selling of USDT and USDC for Naira. This means you can't buy or sell USDT or USDC with Naira, or fund your Onboard USD Card with it.” an in-app memo read. At least two other exchanges have followed suit while two others confirmed to NODO that they are considering the move.

DCC believes this is a goodwill measure that will assuage the government’s fears that crypto is responsible for the vast decline of the naira, which traded as low as NGN2,000 on some crypto exchanges last week.

The rapid depreciation of the naira led Binance to set a NGN1,820 cap on stablecoins trading last week. While several industry stakeholders derided Binance for this move, accusing it of partnering with the federal government to stifle the P2P market, others like the DCC blame Binance for facilitating a rogue market that contributed to the naira’s woes.

The DCC maintains that Binance’s NGN/USD rates were synonymous with the country’s so-called parallel market rate, enabling a national currency decline that originated from manipulative merchants on the platform.

“This practice [on Binance] has contributed to the Naira's 113.1% devaluation against USDT from 09/02/23 to 15/02/24. This implies an average daily depreciation rate of 0.3% over the last 371 days—a period of high activity on the Binance platform,” reads a presentation from the group seen by NODO.

“Following unsuccessful discussions with Binance to inform them of the negative impact of their platform on the Naira and to encourage them to take action - Digital Currency Coalition (DCC) are calling for regulatory action against Binance to protect our currency and economy,” the group added in its presentation sent to the Central Bank of Nigeria (CBN).

It is unclear whether the DCC was instrumental to Nigeria’s restriction of Binance and other global crypto exchanges last week. NODO can confirm that while USDT traded at NGN 1,800 - 2000 last week, local exchange Onboard off-ramped into naira at NGN 1,600, mirroring official market rates.

The clampdown on the crypto industry has intensified over the past week, with several players including Nigerian crypto founders fleeing to neighboring countries to stay safe. A Binance employee anonymously told NODO that some of his colleagues were recently arrested as the government intensified efforts to extract KYC information from the exchange.

“We’re in hiding now, all of us. It’s 2021 all over again,” another employee said, reminiscing the vicious series of events in 2021, when a government-backed clampdown saw bank accounts of suspected crypto traders locked, and some arrested.

On Tuesday afternoon, Olayemi Cardoso, the apex bank’s governor, claimed $26 billion has passed through Binance Nigeria “from sources and users who we cannot adequately identify,” maintaining that the bank is in talks with the police force and anti-graft institutions to prevent players from distorting the Nigerian FX market.

One crypto stakeholder told NODO that while the DCC moves may appear to be noble, the group may be trying to save their own heads, as a crypto clampdown is a disservice to them too. “They don’t mind sacrificing Binance to make things work for them. A Binance departure is a boon for them anyway,” they added.