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Explained: Why Binance, the Giant Crypto Exchange, Restricted 281 Nigerian Users Account?

Binance, the larest cryptocurrency exchange platform in the world has been getting a lot of heat from Nigerian users over the last few days. Just recently, the hashtag “#BinanceStopScamming” was trending on Twitter. Binance is accused of large-scale fraud, reportedly restricting the accounts of Nigerian users that are active in its Peer-to-Peer (P2P) exchange.

What Nigerian Binance users on Twitter are saying about the alleged restriction of their accounts?

Binance tweeted:

At times, we proactively restrict accounts to protect users’ funds. Other times, we have to restrict accounts at the request of law enforcement. But never will we restrict accounts without good reason.

A Letter from Binance CEO to Nigerians why 281 Nigerian Users Accounts were Restricted and its Commitment to User Protection

Binance explains in the blogpost why some Nigerian users account on its platfrom has been restricted and how it plans to resolve the ongoing user cases.

Dear Nigerian Binancians, 

The Nigerian community is one that brings me great pride. Since the inception of Binance, Nigeria and Africa at large have been very special markets to us and for crypto. On hearing the concerns raised by the community, I decided to write to re-emphasize our commitment to you.

First and foremost, we are sorry for the inconvenience caused by delays in resolving your customer support requests. User security remains our top priority. We love and are devoted to our Nigerian community, but we must ensure that our users are safe. As such, protection mechanisms such as KYC, anti-money laundering measures, collaboration with law enforcement, and account restrictions are in place to ensure our community remains protected and that fraudulent activity is prevented. This is a global approach applied in every country.

Some 281 Nigerian accounts have been affected by these personal account restrictions with approximately 38% of these cases restricted at the request of international law enforcement.

Regardless, we owe it to you, our users, to deliver the experience you deserve. Your trust in us is important — and here’s what we’re doing to rebuild that trust:

Regardless, we owe it to you, our users, to deliver the experience you deserve. Your trust in us is important — and here’s what we’re doing to rebuild that trust:

  • Ensuring speedy resolutions of ongoing user cases tied to account restrictions: Currently, we have resolved 79 cases and continue to work through others. All non-law enforcement-related cases will be resolved within two weeks.
  • Devoting more customer service personnel to the region: We will dedicate more CS and risk agents with a great understanding of the Nigerian market.

Rest assured, we are working hard to attend to all customer service requests

Thank you for your continued support and patience. 

Chaopeng Zhao, founder and CEO of Binance

Binance Under Scrutiny from Regulators: How safe is Binance for Nigerian Users?

Binance has been battling with regulatory issues for the previous two to four years, forcing the company to relocate its headquarters from multiple countries as many central banks began to crack down on cryptocurrencies.

  • Britain’s Financial Conduct Authority (FCA) said last week Binance’s UK arm cannot conduct any regulated activity, without saying why it took the action
  • Japan’s regulator sannounced that Binance was operating in the country illegally
  • Bloomberg reported Binance is under investigation by the US Justice Department and Internal Revenue Service
  • The Ontario Securities Commission (OSC) notified its investors that Binance had told its staff there would be no new transactions involving Ontario residents as of Dec. 31, 2021
  • Binance’s German team also received 44 letters from German authorities and law firms that pointed to suspected money laundering on Binance’s platform, says Reuters.
  • In December, Turkey’s financial watchdog fined Binance’s Turkish arm $750,000 for non-compliance with anti-money laundering requirements—the highest penalty it could levy under the country’s laws. 

Binance Under Scrutiny in Alleged $100M Scam in Pakistan

According to an article published by CoinDesk, the Pakistan Federal Investigation Agency (FIA) on Monday, January 10th reportedly sent a notice to the cryptocurrency exchange, Binance about a scam that has grifted over $100 million from several thousand investors. The alleged scam in question had to do with 11 mobile applications, 26 wallets and several thousand investors.

Launched in 2017, Binance is now the world’s top crypto exchange by volume. Every day, it processes more than $76 billion worth of cryptocurrencies, according to third-party estimates as of November. Due to the Central Bank of Nigeria’s (CBN) ban on cryptocurrencies, many Nigerian users can not report the alleged fraud to the necessary authorities and have been forced to call out the cryptocurrency exchange on social media. Although the use of third party and other alternatives to buy and sell tokens cant be trusted and have a high crime rate. Lack of regulation of cryptocurrency in Nigeria and other African countries has created a lucrative ground for scams, with Africans losing millions of dollars in swindles.

Recall, In 2019 thousands of Nigeria cryptocurrency investors and traders reportedly accused Paxful, a major cryptocurrency services firm based in Estonia of large-scale fraud in millions of dollars.

What are your thoughts on the restriction of Nigerian users accounts by Cryptocurrency exchange platforms?

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