The Special Adviser to Nigerian President Bola Ahmed Tinubu on information and strategy, Mr Bayo Onanuga, has clarified statements regarding a purported $10 billion fine on the crypto exchange platform, Binance.
Reports circulating, particularly by the BBC on Friday, suggested that Binance faced a hefty penalty, but Onanuga insists that his words were misrepresented. He asserts that no final decision has been made regarding the fine and that Binance has yet to be officially informed about any such penalty.
He explained that he never stated that the Cayman Islands company had been informed about the fines, nor did he say that Nigerian regulators expressly agreed upon the supposed $10 billion.
According to him, “I said our government may impose heavy fines on Binance for what happened,” Onanuga explained. “I never said Binance had been informed about the fines or that it would definitely be $10 billion.”
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Regulatory Scrutiny and Binance’s Response
The speculation comes amidst heightened regulatory scrutiny of crypto exchanges in Nigeria.
Binance recently removed the naira from its peer-to-peer service, a move seen as responding to regulatory pressures.
In reaction to the $10 billion fine, the crypto company clarified that Binance is not considering fines, even as it plans to restore its recently cut-off service.
“Our aim is to chart a good relationship with the government and the people of Nigeria. We want to see our services restored in Nigeria very soon, but we have no intention of paying fines for personnel or services,” Binance said.
Central Bank of Nigeria’s Concerns
The Central Bank of Nigeria (CBN) has expressed concerns about the flow of funds through Binance’s Nigerian arm. CBN Governor Olayemi Cardoso highlighted that $26 billion passed through Nigeria via Binance in 2023 from unidentified sources and users, raising suspicions of illicit financial activities.
According to Cardoso, the apex bank is “concerned that certain practices go on that indicate illicit flows going through a number of these crypto platforms and suspicious flows at best. In the case of Binance, in the last year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
He added that the government has mobilised various agencies, including anti-corruption bodies and law enforcement, to investigate cryptocurrency exchanges thoroughly.
Crackdown on Cryptocurrency Exchanges
The Nigerian government had taken steps to regulate the cryptocurrency industry, including detaining two senior Binance officials in Abuja. This crackdown follows the lifting of a two-year ban on banks engaging in crypto transactions and the issuance of guidelines for regulating virtual asset service providers in December 2023.
Nigeria’s approach to regulating cryptocurrencies is evolving, with the launch of a central bank digital currency in 2022 and the introduction of the naira-pegged cNGN stablecoin. The situation with Binance underscores the challenges and complexities of regulating the cryptocurrency industry in Nigeria and globally.