Presidency Warns that Binance Poses a Threat to Nigeria’s Economy if Unchecked
Nigerian authorities have taken action against cryptocurrency exchanges in the country, detaining two high-ranking executives from Binance on allegations of currency manipulation and illegal fund movements. This move is part of a larger effort to stabilize the foreign exchange market and protect the local currency, the naira.
The detentions occurred after failed negotiations between Binance and Nigerian officials, who have been cracking down on crypto platforms including Binance, Kraken, and Coinbase. Concerns about the use of crypto platforms for criminal activities and their impact on the naira have prompted regulatory action, despite warnings from the Nigeria Securities and Exchange Commission.
The detained executives were held for at least twelve days due to stalled negotiations, demands for transaction data, and embassy involvement. This marks a significant escalation in the ongoing battle between regulators and crypto platforms.
Prior to the detentions, Nigerian officials, including Bayo Onanuga, a special adviser to President Bola Ahmed Tinubu, accused Binance of contributing to the rapid decline of the naira. The Nigerian Communications Commission directed telecom companies to restrict access to Binance, Coinbase, and Kraken websites for residents.
The Central Bank of Nigeria has raised concerns over $26 billion flowing through Binance Nigeria in a year, citing worries about illicit financial activities. Governor Olayemi Cardoso revealed that a collaborative investigation involving Nigeria’s anti-corruption wing, the police, and the national security advisor’s office is underway. Authorities are now seeking a comprehensive list of all Binance users in Nigeria.
The focus of the crackdown lies in Binance’s peer-to-peer (P2P) trading method, which allows direct transactions without intermediaries. Concerns have arisen when individuals sell USDT at inflated prices in Nigeria, impacting the naira. In response, Binance has disabled its P2P feature, preventing Nigerian users from transacting among themselves. There are rumors that the USDT/naira trading option may have been removed.
As investigations continue and regulatory pressure increases, the future of crypto trading in Nigeria remains uncertain. This development reflects broader global debates on crypto regulations and their potential impact on financial stability.
The once-thriving crypto landscape in Nigeria now faces uncertainty, as regulators and industry giants clash in search of a resolution.