On Wednesday, the 26th of January, 2022, Binance – blockchain ecosystem and cryptocurrency exchange platform was accused of blocking the accounts of Nigerians.
This however led to many accusing the exchange of blocking accounts for weeks and months without any feedback or reason given by the exchange.
Furthermore, it became the third trending topic on the mini blog site, Twitter with over 25,000 tweets and on Thursday, the 27th of January, it was amongst the top 5 with over 10,000 tweets, going with the hashtag, #BinanceStopScamming.
Responding to all these allegations Binance’s CEO, Changpeng Zhao (CZ), in his letter, titled, “Our commitment to User Protection”, directed to Nigerian users, stated that, “User security remains top priority of Binance”.
He further added in his letter, “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.”
The letter from CZ comes after the Binance Africa team, led by Emmanuel Babalola, the African director of the exchange platform, Damilola Odufuwa, the PR lead for Binance Africa and Ben Nsikan, the community manager for Binance Africa, hosted a Ask Me Anything (AMA) session on YouTube, where the team set out to address various issues that have been raised around social media, particularly about the world’s global exchange, locking accounts of its African users, particularly its Nigerian users and the Nigerian market.
Emmanuel Babalola, the African director of the exchange, in the AMA session hosted by Binance, explained that approximately 200 people filled out the forms the exchange put out on social media.
He further stated that 30% of the alleged blocked accounts were related to stolen cryptocurrencies and were cases with law enforcement agencies, while 70% were general issues related to know your customer (KYC) requirements.
Also, the letter by CZ gave more updates on the recorded accounts, stating that 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.
CZ also revealed that 79 cases have been resolved and will, “continue to work through others.” He said that all non-law enforcement-related cases will be resolved within two weeks.
Asides the letter, CZ still tendered an apology via a tweet saying, “Not perfect, but transparent. Apologies of the inconvenience. And thank you for your support and understanding!”
Following the ban on cryptocurrencies by Nigeria’s apex financial institution, the Central Bank of Nigeria (CBN), many Nigerians have been forced to partake in the crypto market via Peer-to-peer (P2P) exchanges, telegram groups and WhatsApp groups, where buyers and sellers alike come together to exchange tokens for cash.
These methods, although serving as alternatives, is still relatively flawed as there is a high crime rate as it largely depends on trust.
This has been a major trend with the users experiencing issues with the exchange as they have in one shape or form bought coins off the exchange and tried trading them on the exchange.