Nigerian Court Requests Binance User Data for Naira Devaluation Lawsuit
Nigerian Court Orders Binance to Provide User Data to Anti-Graft Agency
In a major development, a Nigerian High Court has issued an order for Binance Holdings, a leading cryptocurrency exchange, to disclose detailed information about Nigerian traders using its platform. This action comes in response to allegations that the platform is involved in the devaluation of the Nigerian Naira.
The Economic and Financial Crimes Commission (EFCC) initiated legal proceedings against Binance through an ex parte motion, which means that only one party is present in court, denying the opposing side prior notice and the opportunity to present a counterargument.
Representing the anti-graft agency, lawyer Ekele Iheanacho argued that Binance’s operations in Nigeria have raised suspicions of criminal activity. To support this claim, EFCC operative Hamma Bello submitted an affidavit citing concerns over alleged money laundering, terrorism financing, and the manipulation of currency associated with the platform.
EFCC investigators have uncovered illicit activities on the cryptocurrency platform, including price manipulation and market distortions. They assert that these activities have had a significant impact on the foreign exchange market, leading to the devaluation of the Naira against other currencies. As a result, Binance has removed the Nigerian Naira from its trading platform.
In response to these findings, the Nigerian government has demanded crucial information from Binance, including details of its top 100 local users and six-month transaction records. Authorities argue that Binance’s operations have hindered efforts to stabilize the national currency.
Nathaniel Luz, CEO of Flincap, views the court order as a positive step for the Nigerian government but suggests that diplomatic dialogue between Binance and authorities should also take place. On the other hand, Bayo Onanuga, the presidential adviser on information and strategy, advocates for banning platforms like Binance in the country.
Nigeria has stepped up its crackdown on the crypto industry, citing concerns over illegal capital outflows contributing to the depreciation of the Naira against the dollar. Specifically, authorities have targeted Binance and are seeking $10 billion in penalties for facilitating $26 billion in untraceable funds.
Two foreign Binance executives are currently detained in Nigeria as investigations continue.
The court’s order represents a significant moment in the Nigerian government’s efforts to regulate the cryptocurrency sector and combat financial crimes. However, the outcome of this legal battle and its implications for both Binance and Nigerian traders remain uncertain.