Here’s the real reason why Binance blocked over 200 Nigerian accounts

Fintech platform Binance was called out on the streets of Nigerian Twitter last month for blocking users' accounts.

Binance is a world-class leading crypto exchange platform that processes more than 75 billion transactions daily. It came as a shock for many that Binance would suddenly block some users' accounts.

A Nigerian Twitter user identified as Joshua Nwogo first tweeted about the challenge he had been facing with his Binance account over the last 6 months. Moments later, some other users also shared similar experiences with screenshots as proof. Nwogo started an online boycott against the platform with hashtags - #boycottbinance #binancestopstealingcrypto #binancestopscamming #stoptradingonbinance. He called the exchange a scam and urged other customers to stop using the app as no response was given to him query for nearly half a year.

The tweet immediately became a thread as other unsatisfied customers with similar experiences began speaking up. Within minutes, the tweets picked up with how the Binance representative reportedly handled the situation with no remorse. By the next day, the matter had escalated with Nigerians lashing the exchange.

Binance’s failure to respond immediately to the matter sparked different reactions and theories as to why the company blocked users' accounts. Some claimed racism – calling the platform anti-African, while others claimed the company was simply stealing coins from Nigerians knowing that the government would never intervene.

After much deliberation and lashing, the Binance African division eventually spoke out on behalf of the company. It made a Twitter thread apologizing to the affected users for any inconveniences and provided a link to an online complaint form that would help the company track and resolve the issues. A few hours later, the exchange set up a YouTube ask-me-anything session for their Nigerian customers to address all pending issues and concerns over account restrictions, user safety, and Binance peer-to-peer.

The Binance YouTube AMA session which lasted an hour was hosted by Head of Public Relations Dami Odufuwa, Binance African community manager Nsikan Benjamin, and Binance Africa Director Emmanuel Babalola.

“We have recorded over 200 cases of blocked accounts and counting, and 30% of them are fraud-related while the rest are a case of [incomplete] KYC,” Babalola said. “We have started resolving these issues and also sent notifications to those whose cases are law enforcement related.”

The KYC mentioned above refers to the company’s “know-your-customer” registration. Meaning that some customers were yet to complete their means of identification before they can access more Binance products. Their accounts would only be blocked if they persist to access these restricted products with an incomplete KYC.

Despite the exchange being decentralized and not backed by any government, their policies on fraudulent activities include reporting such accounts to the necessary law enforcement agencies. In 2021, Binance like many other fintech and crypto platforms in Nigeria came under heavy scrutiny and restriction by the Nigerian government. Binance also faced scrutiny from regulators including the US, the UK, the Netherlands, Malaysia, Cayman Islands, Hong Kong, Germany, Canada, Thailand, and Lithuania.

These governments had lots of concerns over the use of platforms like Binance to launder money and how the exchange is an unregulated instrument of fraudulent activities. Several countries have begun an investigation and have reduced Binance’s activities, some others have completely banned all crypto-related activities.