In the ongoing saga surrounding Binance’s operations in Nigeria, an expert has weighed in, asserting that the cryptocurrency exchange’s role in the Naira’s depreciation may have been overstated. Ndubuisi Ekekwe, Lead Faculty at Tekedia Institute and Chairman of Tekedia Capital, took to X to analyze Binance’s response to Nigerian authorities.
According to Ekekwe, Binance disclosed to the Office of National Security Adviser (ONSA) that Nigerian trading volume on its platform in 2023 alone amounted to $21.6 million. This figure stands in stark contrast to the Nigerian government’s earlier claim that around $26 billion had been moved via Binance from Nigeria, presumably referring to the exchange’s lifetime data since its founding in 2017.
Ekekwe’s calculations suggest that if the $26 billion figure were accurate, the average annual trading volume from Nigeria on Binance should be around $4.3 billion. However, Binance’s reported $21.6 million for 2023 alone is significantly lower, indicating a substantial discrepancy in the numbers.
In light of this disparity, Ekekwe argues that the only way forward is for Binance to produce the requested data, as the numbers are “totally out of sync.” However, he cautions against placing excessive blame on Binance for the Naira’s woes, stating, “no one should be deceived that Binance is Naira’s problem.”
The game of chess has started as Binance responds to Nigeria: "According to data provided by Binance to the ONSA [Office of National Security Adviser], Nigerian trading volume on the platform in 2023 alone amounted to $21.6 million." Note "million", not "billion".
Recall that… pic.twitter.com/2SfWRly3lB
— Ndubuisi Ekekwe (@ndekekwe) March 18, 2024
Budget Padding Destroying the Naira
Ekekwe points out that despite Binance disconnecting the Naira from its ecosystem, the currency’s exchange rate has not recovered to its previous levels of around N600 per US dollar. This, in his view, suggests that deeper underlying issues are at play.
Drawing attention to the broader economic landscape, Ekekwe cites the recent budget padding controversy in the National Assembly as indicative of ongoing governance challenges in Nigeria. He argues that until these “demons” are addressed, the Naira’s decline is likely to continue, regardless of Binance’s involvement.
Moreover, Ekekwe notes that Binance operates in other African markets without causing similar currency collapses, further reinforcing his stance that the exchange alone cannot be solely responsible for the Naira’s struggles.
As the situation unfolds, all eyes will be on Binance’s compliance with the Nigerian authorities’ data requests and the subsequent implications for the cryptocurrency exchange’s operations in the country. However, Ekekwe’s analysis shows the need for a holistic examination of Nigeria’s economic and governance challenges, which may prove more pivotal in addressing the Naira’s ongoing decline.
