Nigeria Investigates Binance on Currency Impact, Detains Top Executives
Summary:
Nigeria's government is seeking details on Binance's top 100 users over concerns the exchange impacted the local currency. The president's adviser has suggested banning such platforms, attributing a massive decline in the local fiat to their operations. Despite efforts by Binance to negotiate, two top executives have been detained. Despite halting all naira transactions amid these discussions, a Binance spokesperson affirmed their continued presence in the Nigerian market. This situation arises as Nigeria navigates a significant inflation surge, following policy changes in its forex market.
As part of an ongoing investigation, Nigeria's government is reportedly interrogating Binance for the account details and transaction history of its top 100 users in the country. This revelation was unveiled in a Financial Times report on March 13. The Nigerian national security adviser's office has also requested that Binance address any outstanding tax issues.
This move forms part of the dialogue between Nigeria and Binance, given allegations that Binance significantly impacted Nigeria’s local currency, the naira. The presidential adviser on information and strategy, Bayo Onanuga, charged Binance and similar crypto platforms with causing a dramatic depreciation in the naira's value. He proposed the banning of such platforms in Nigeria.
Despite Binance attempt to engage with Nigerian authorities, Tigran Gambaryan and Nadeem Anjarwalla, two of Binance’s top executives, have been detained. They are still being held, even after Binance halted all transactions involving the naira by late February. Onanuga disclosed that both executives were cooperating with authorities, offering a wealth of information. Onanuga hinted at a possible $10 billion fine, claiming that Binance had severely adverse effects on Nigeria's economy.
The national security adviser's office urged for patience, stating that investigative outcomes would be publicised in due course. Binance, however, has refused to comment on the Nigerian authorities' allegations. They have, however, indicated, through a spokesperson, that Binance had not abandoned the Nigerian market, but simply halted trades and transactions involving the naira.
Concerns are abound regarding Binance's ability to continue servicing users in Nigeria under these circumstances. One online user argued that it was a sign of disengaging from anything related to Nigeria.
Despite these setbacks, Nigeria has soared to become one of the fastest growing crypto economies over the past few years. Nigeria ranked second in global crypto adoption in 2023 and was declared the most crypto-savvy country in the world, based on Google searches for "cryptocurrency" and "buy crypto".
However, following the abandonment of its fixed exchange rate and adopting a free-float exchange rate for the naira in June 2023, Nigeria has experienced historic inflation levels. Consumer inflation surged to nearly 30% in January 2024, marking 13 consecutive months of increase. This is according to data from the National Bureau of Statistics.
Published At
3/13/2024 12:42:31 PM
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