A Federal High Court in Abuja has ruled in favour of the Economic and Financial Crimes Commission (EFCC), ordering Binance Holdings Limited to furnish comprehensive information regarding Nigerian traders on its platform.
The court’s decision, delivered through an ex-parte motion, underscores the intensifying efforts to address concerns surrounding illicit financial activities linked to cryptocurrency exchanges.
EFCC’s Ex-Parte Motion
The suit, marked FHC/ABJ/CS/259/2024 and dated February 29, was initiated by the EFCC under Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the Economic and Financial Crimes Establishment Act, 2004, as well as Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022. The motion, supported by an affidavit from EFCC operative Hamma Bello, alleges nefarious activities, including money laundering and terrorism financing, occurring on the Binance platform. Bello cited intelligence indicating significant distortions in the market and the devaluation of the Naira due to trading activities on Binance, with an estimated trading volume of $21.6 billion from Nigeria in 2023 alone.
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Interim Order Granted by the Court
Justice Emeka Nwite, presiding over the case, granted the EFCC’s application and directed Binance to provide comprehensive data on Nigerian traders. The interim order emphasizes the urgency of the matter and highlights the court’s commitment to facilitating the EFCC’s investigation into potential financial crimes facilitated through the platform.
Binance’s Regulatory Challenges and Response
Binance has faced mounting regulatory challenges beyond the African landscape, with countries like America clamping down on the platform on money laundering charges.
Recent reports revealed that the Central Bank of Nigeria Governor, Olayemi Cardoso, disclosed that more than $26 billion had been channelled through Binance without traceability over the past year.
Additionally, the company’s executives were detained upon their arrival in Nigeria following a ban on its website.
In response to the court’s order, Binance reiterated its commitment to compliance with regulatory requirements and pledged to cooperate fully with the EFCC’s investigation. The company emphasized its dedication to addressing concerns surrounding illicit financial activities and reiterated its commitment to fostering transparency and accountability within the cryptocurrency industry.
Read also: Binance Global Head of Product quits
Ongoing Negotiations and Future Implications
The EFCC’s request for data on Binance’s top 100 users in Nigeria and transaction history for the past six months underscores the depth of regulatory concerns surrounding the platform’s operations. As negotiations continue between Binance and Nigerian authorities, the outcome of these discussions could have far-reaching implications for regulating cryptocurrency exchanges in the country.
In Nigeria’s rapidly evolving regulatory landscape, cryptocurrency exchanges face increasing pressure to adhere to stringent compliance measures and ensure robust oversight of their platforms. The outcome of the EFCC’s investigation into Binance’s operations in Nigeria is likely to set a precedent for regulatory action against other cryptocurrency exchanges operating in the country.