Nigerian High Court Orders Binance to Share User Data Amidst Money Laundering Allegations
Summary:
The Nigerian High Court has ordered Binance Holdings to provide the Economic and Financial Crimes Commission (EFCC) with detailed data of all Nigerian users on its platform. This follows an ex parte motion brought by the EFCC, alleging that Binance's activities in the country may involve criminal elements. The Commission is currently investigating allegations of money laundering and terrorism financing. Given significant impacts on the local foreign exchange market, the EFCC has requested to remove the naira from Binance's trading platform.
Instructions from a Nigerian High Court have been issued to Binance Holdings’ operators. They have been ordered to supply the Economic and Financial Crimes Commission (EFCC) with detailed records and information on all Nigerians using their platform for trading. Local news resource, Sahara Reporters, revealed that this order was part of an interim ruling by Justice Emeka Nwite on February 29. The ruling came as a response to an ex parte motion lodged against Binance, the cryptocurrency exchange platform by the EFCC. An ex parte motion involves only one participating party, and the defense receives no advance notice, which prevents them from arguing against the motion. The attorney for the anti-corruption unit, Ekele Iheanacho, argued that the actions of Binance in Nigeria present traces of criminality. This proposition contradicts Section 38 of the EFCC Act, 2004 as well as Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended), that necessitates the disclosure of suspicious transactions to the appropriate authorities with penalties applicable for non-compliance. In a sworn statement, Hamma Bello, an operative from EFCC, emphasized the need for the Commission to finalize their ongoing investigation upon receiving intelligence evidence alleging money laundering and terrorism financing involving Binance.The EFCC claimed their team uncovered users exploiting the platform for illicit purposes such as price discovery, verification, and market manipulation after receiving this intelligence, and these activities have significantly distorted the foreign exchange market and caused the naira to depreciate further against other currencies. The EFCC alleges that Binance operators were informed of the detrimental impacts of these activities on Nigeria's economy, leading to a request to remove the naira from Binance's list of trading platforms. Nathaniel Luz, CEO of Flincap, a liquidity platform for cryptocurrency exchanges, opined in a discussion with Cointelegraph that as much as this court directive is advantageous to the Nigerian government, an open dialogue between the government and Binance would be the best course of action. Bayo Onanuga, the presidential adviser on information and strategy, accused Binance and other cryptocurrency platforms of manipulating the naira, leading to a drastic fall in the value of the local currency. He further suggested that platforms like Binance should be banned in the country. In recent years, Nigeria has evolved into one of the world's most rapidly expanding crypto economies and is slated to be the second largest economy in terms of crypto adoption in 2023.
Published At
3/20/2024 10:36:00 AM
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