Recently, Nigeria officially requested that Binance, the world’s largest cryptocurrency exchange, be fined a hefty $10 billion. As reported by the BBC, these demands stem from claims that Binance played a pivotal role in the sharp devaluation of Nigeria’s fiat currency.
Nigeria’s currency, the Naira, has taken a significant hit over the past few months, losing nearly 70% of its value, which the Nigerian government blames on Binance.
Criticism flies.
The Nigerian government, under the leadership of President Ahmed Tinubu, alleged that Binance not only destabilized the naira by manipulating exchange rates, but also facilitated illicit financial activities, including money laundering, theft, and fraud.
In a strong response, the government took drastic measures, including detaining two of Binance’s top international executives to investigate allegations related to money laundering and terrorist financing.
Read more: Binance will destroy Nigeria’s economy if not stopped: Presidency
Trade and regulatory concerns
The Central Bank of Nigeria (CBN) noted that approximately $26 billion was transferred through Binance’s Nigerian operations, involving transactions that the CBN was unable to fully trace. This lack of transparency has raised doubts about the reliability of cryptocurrency transactions in the country and further aggravated existing skepticism about the cryptocurrency industry.
Binance’s Legal Obstacles
Binance’s legal status in Nigeria adds another layer of complexity. According to Bayo Onanuga, President Bola Tinubu’s spokesperson, Binance and similar companies have failed to register under Nigerian law. This issue became apparent after Nigeria lifted its ban on cryptocurrencies with the condition that all operators must be formally registered.
ALSO READ: Nigerian Authorities Announce Ban on Cryptocurrency Exchanges to Save Naira
The tension continues…
In response to pressure from the government, Binance has reportedly begun collaborating, including removing naira transactions from its platform and engaging in negotiations to comply with Nigerian regulations. Although it is seen as a positive step towards resolving the dispute, the outcome and duration of the ongoing investigation remain uncertain.