If you go to Binance P2P, there is heavy manipulation going on there. And from my deductions, most of the big Binance P2P merchants are united in carrying out this manipulation. Some of them even have over $2 million worth of USDT in their wallet which begs the question of whether these people are truly Nigerians or probably foreigners making money from destroying the Nigerian economy.
Many people might not understand the strategy these merchants use, therefore, I will try to break it down.
This is how the manipulation works;
Let’s assume that the naira to $ is currently exchanging at the parallel market for N1,500. On Binance P2P, this group of merchants will create multiple fake ads claiming they will buy your USDT for N1,700 (way above the parallel market price).
I call these ads “fake” because they will set a minimum limit above N5 million, which means if you want to sell your USDT to them at this exorbitant rate that they created, you must be selling the value worth over N5 million at once.
This strategy works in filtering out the majority of average Nigerians who want to sell their USDT to these merchants. This means the fake ads will remain at the top of the P2P “sell” section for as long as these groups of merchants want it to remain. And if by chance someone who has enough USDT to meet the minimum limit decides to sell to these merchants, they will simply cancel the trade, and create another ad.
Now because these group of merchants have filled the P2P “sell” section with these fake ads claiming to buy your USDT at an exorbitant rate of N1,700, they have automatically shifted the P2P price of Naira to USD to N1,700.
They will be selling their USDT to the public under the “buy” section above N1,700. Now, unlike the fake ads they created with a minimum limit that is above N5 million to discourage sellers from selling to them at this high rate when they are selling their USDT at this already manipulated price, you will find a limit as low as N4,000 because they want to sell to the Public at the exorbitant price they created.
Binance P2P is the new AbokiFx where BDC operators get their current price of USD from. The fake price originating from there is in turn used by the BDC operators to set their USD selling prices even without any corresponding demand. But the interesting part is that these BDC operators won’t buy from you at any rate close to the exorbitant price they are selling the dollar to you.
Here in Benin City, even though the parallel market price of Naira is above N1,600, the BDC operators hardly buy your dollar for above N1,500 but they will sell to you only above N1,700.
Some people might argue that if Binance is to blame, how come the official exchange rate is now above 1,500NGN to 1 USD? The answer to that is simple. Each time the rate in the parallel market moves up, the Central Bank Governor is forced to adjust official rates upwards to close the gap between both windows or else the black market rate will be too wide that it will create an irresistible opportunity for round-tripping.
There is a huge rot in the entire BDC system in Nigeria and I don’t think the CBN governor has any idea how deep it goes.
Daniel Uyi writes from Benin City.
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