In recent days, Nigerian regulatory authorities have intensified their scrutiny of crypto exchanges, with a particular focus on Binance.
In addition to blocking access to the exchange’s website and compelling it to cease operations of its naira peer-to-peer (p2p) marketplace, regulators have detained two of Binance’s executives in pursuit of customer information and transaction data. Furthermore, an aide to Nigeria’s president has revealed that the exchange is expected to face a substantial fine as part of an expanding regulatory crackdown.
Binance on the Hook for $10B?
During an interview with the B.B.C. on Friday, March 1, Bayo Onanuga, an aide to the Nigerian president on information and strategy, revealed that the country has demanded $10 billion in penalties from Binance.
Onanuga asserted that the firm had amassed substantial profits from purportedly illicit trading activities conducted on its platform, resulting in significant losses for Nigeria.
Moreover, the presidential aide highlighted that Binance was currently in cooperation with authorities. Onanuga cited the exchange’s decision to cease operations of its peer-to-peer (p2p) platform for Nigerians as evidence of this collaboration.
In the course of the Friday interview, Onanuga emphasized that Binance, along with other cryptocurrency exchanges, had neglected to adhere to proper registration procedures before providing services to Nigerians.
Is Binance To Blame for the Naira’s Declining Value Against the Dollar?
Amidst the Nigerian naira’s plummet to record lows of 1,900 against the dollar in the past week, crypto exchanges, notably Binance, have found themselves under intense scrutiny from Nigerian authorities. These authorities have leveled accusations against the exchanges, alleging their involvement in facilitating the devaluation of the currency.
Regulators claim that nefarious actors engaged in wash trading of the USDT-NGN pair on Binance’s peer-to-peer (p2p) marketplace by orchestrating fake buy and sell orders. This manipulation reportedly had a ripple effect across the market, resulting in the depreciation of the naira for personal gain.
In light of the alleged market manipulation, authorities argue that cracking down on Binance is imperative to safeguard the economy.
Additionally, Nigerian regulators have accused Binance of acting as a conduit for illicit fund transfers. Olayemi Cardoso, the country’s central bank chief, asserted in a statement to the press on Tuesday, February 27, that approximately $26 billion flowed through Binance in 2023 alone from sources that were not adequately identified.
Moreover, according to a report from the local news outlet Channels on Thursday, February 29, authorities are investigating Binance for its alleged role in facilitating terrorism financing and other criminal activities.
As of now, Binance has not responded to requests for comment regarding the situation.
Why This Matters
Facing increasing regulatory hurdles worldwide, Binance, recognized as the world’s largest cryptocurrency exchange, has witnessed a significant decline in its market share over the past year. The recent turmoil in Nigeria, home to the globe’s largest peer-to-peer (p2p) cryptocurrency marketplace, is poised to deliver yet another setback to the leading industry player.
