The Nigerian government may be considering clamping down on cryptocurrency trading platforms to stabilise the naira amid a foreign exchange crisis.

Nigeria, Africa’s largest economy, is battling a currency crisis and soaring inflation, with the country facing one of its worst cost of living crises in recent years.

A Premium Times report said cryptocurrency platforms might take the hit for manipulation and unethical conduct responsible for the inflation of foreign exchange against the naira.

The report, quoting presidency and regulatory sources, said the government decided to move against Binance and other crypto firms following reports that currency speculators and money launderers were using them to execute criminal activities.

Despite several policies introduced by the Central Bank of Nigeria (CBN) in recent weeks, the Nigerian naira continues to depreciate against the dollar.

Checks by The Guardian showed that a US dollar traded for naira at N1850 as of late Tuesday on cryptocurrency platforms.

“Many people are relying on these platforms that have no business being our forex regulator to get their exchange rates,” Bashir Ahmad, a former spokesman to former President Buhari, said on X.

“When the rate goes up on these platforms, it automatically goes up in the Bureau De Change. It should be fixed!”

The presidency and regulatory sources said the “criminal activities” on platforms are contributing significantly to the weakening of the naira, which has now fallen to an all-time low of N1,800 to a dollar in the parallel market.

“Binance, a digital assets platform, serves as a window for peer-to-peer transaction allowing users to advertise interest to sell or buy currencies of their choice.”

The Nigerian government has been conservative about cryptocurrency in the last four years since a CBN ban over alleged terrorism funding and money laundering. The new government lifted the ban in January.

Nigeria’s National Security Adviser Nuhu Ribadu recently ordered law enforcement agencies to take disciplinary measures against anyone and entities engaged in foreign exchange market speculation.

Ribadu said CBN’s initiatives were “being undermined by the activities of speculators, both domestic and international, operating through various channels, thereby exacerbating the depreciation of the Nigerian naira and contributing to inflation and economic instability.”

Cryptocurrency exchange Binance insisted that its platform is for legitimate businesses only and that it would work with the Nigerian authorities to stamp out market manipulations.

“As industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance,” Binance said in a website statement on Tuesday.

“To be clear: if users are behaving in a malicious or manipulative way, they will be removed from the platform.”