The Federal Government of Nigeria has escalated its crackdown on the crypto exchange platform Binance, demanding a staggering $10 billion in retribution.
This move follows Binance’s settlement of $4.3 billion for criminal money laundering charges in the U.S.
The government’s pursuit of retribution aims to salvage the nation’s local currency value amidst allegations of substantial profits made by Binance through “illegal transactions” in Nigeria.
Read also: Nigeria cracks down on Binance, arrests top officials
Government’s Allegations and Investigation
Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, revealed the government’s stance, emphasising that Binance operated without registration or presence in Nigeria.
The Office of the National Security Adviser (ONSA) confirmed an ongoing interagency investigation into Binance’s operations, highlighting concerns over illicit activities impacting the nation’s financial stability.
Detention of Binance Executives and Demands
Recall that on Wednesday, two Binance executives were detained in Abuja following failed negotiations with Nigerian authorities.
The executives faced demands for transaction data involving the Nigerian Naira over seven years and requests for data deletion from the platform. Despite these demands, the executives insisted on embassy involvement before compliance.
Retribution Claims and Cooperation
Mr. Onanuga asserted that Binance must pay $10 billion as retribution for its detrimental impact on Nigeria’s economy through arbitrary foreign exchange rate fixing.
He had said earlier on Wednesday during a televised interview that: “If we don’t clamp down on Binance, Binance will destroy the economy of this country. They just fix the rate.”
While alleging destructive consequences if unchecked, he acknowledged Binance’s cooperation with providing information and suspending naira-related transactions.
Background and Regulatory Actions
The Nigerian government’s actions against Binance align with broader measures to curb forex market manipulation and illicit fund movements by blocking several crypto platforms. Concerns over criminal activities contributing to currency devaluation prompted regulatory scrutiny. Nigeria’s Securities and Exchange Commission previously deemed Binance Nigeria Limited illegal due to lack of registration.
Binance’s Response and Legal Proceedings
In response to regulatory pressures, Binance vowed to address manipulative behaviours on its platform and collaborate with authorities for compliance. Founder and CEO Changpeng Zhao (CZ) pleaded guilty in a U.S. criminal money laundering case, leading to a $4.3 billion settlement and his planned resignation pending legal proceedings.
According to Binance, “As industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance,” the platform added, noting that it is “setting an upper limit for ads, filtering and removing bad ads, requiring and raising deposits for merchants posting ads as well as processes for actioning against any market manipulators.”
This unfolding saga between the Nigerian government and Binance underscores the complexities of regulating digital assets amid global financial dynamics and underscores the challenges faced by crypto platforms operating in diverse regulatory landscapes.