Binance, the global cryptocurrency exchange, is endeavouring to mend its relationship with Nigerian authorities in light of recent regulatory strains. 

In a statement released on Thursday, Binance reaffirmed its commitment to compliance and collaboration with Nigerian regulatory bodies.

Extensive Cooperation with Nigerian Authorities

Highlighting its proactive engagement, Binance disclosed its robust cooperation with Nigerian law enforcement, having responded to over 626 information requests since 2020, with an impressive average response time of under 38 hours. The exchange asserts that this cooperation significantly aided investigations into various financial crimes, including scams, fraud, and money laundering.

Moreover, Binance conducted specialised training sessions for officials from Nigeria’s Economic and Financial Crimes Commission (EFCC) in August 2023, focusing on cryptocurrency investigations and internal procedures. These initiatives underscore Binance’s dedication to fostering productive partnerships with Nigerian authorities. Additionally, the exchange claims ongoing collaboration with the Nigerian Financial Intelligence Unit (NFIU) and the Nigeria Police Force to enhance training initiatives and operational coordination.

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The statement from Binance comes amidst heightened scrutiny of cryptocurrencies by the Nigerian government. Recent events, including the detention of two Binance executives—Tigran Gambrayan and Nadeem Anjarwalla—following their visit to resolve issues surrounding the exchange’s banned website, underscore the challenging regulatory landscape.

The arrests are part of Nigeria’s crackdown on forex speculation, triggered by currency volatility following the removal of exchange rate controls. Despite Nigeria not being a top market for Binance, the country ranks second globally in terms of crypto adoption, according to Chainalysis.

Demands and Detentions

Nigeria’s government has reportedly demanded information on Binance’s top 100 users and transaction history spanning the past six months. This demand coincides with the prolonged detention of Binance executives Gambrayan and Anjarwalla, who have been held since February 25 without charges. The government views Binance as a significant factor undermining currency stabilisation efforts and seeks resolution of outstanding tax liabilities.

In response, a Binance spokesperson confirmed collaborative efforts with Nigerian authorities to secure the release of the detained executives. Despite a court order allowing detention for 14 days, with an extension hearing scheduled, neither Gambrayan nor Anjarwalla have been charged, with concerns raised about their treatment and the nature of their detention.

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Crux of Nigeria-binance scuffle

The regulatory conflicts between Binance and Nigeria have escalated due to the Nigerian government’s concerns about currency destabilization and financial crimes. Nigeria’s government has demanded transparency from Binance, requesting information on the top 100 users and transaction history to address tax liabilities and currency stabilization efforts. The detention of Binance executives Tigran Gambrayan and Nadeem Anjarwalla without formal charges reflects the government’s stance on holding the cryptocurrency exchange accountable for alleged financial misconduct.

By detaining Binance officials, the Nigerian government aims to achieve several objectives. Firstly, it seeks to address concerns related to currency manipulation and speculation, which have contributed to the depreciation of the Nigerian naira. Secondly, the government aims to enforce regulatory compliance within the cryptocurrency sector to safeguard the country’s financial stability. Additionally, the detention serves as a signal of the government’s commitment to holding entities like Binance accountable for their operations and ensuring adherence to financial regulations.

Meanwhile NIgerians have begun finding alternatives to BInance to continue their crypto transactions as crypto experts are unperturbed by the clampdown happening in the industry.