The federal government of Nigeria has requested information from Binance regarding its top 100 users in the country, including transaction history for the past six months, as investigations into currency speculation allegations continue into the third week.
THISDAY reported that the request to disclose the individuals engaged in trading activities was a key aspect of ongoing negotiations between the federal government and the exchange.
Binance is under investigation for its role in speculative attacks against the Naira, which has experienced significant volatility against major currencies, especially the Dollar, amid currency devaluation.
According to the Financial Times, the Office of the National Security Adviser is also insisting that the exchange settle any outstanding tax liabilities to the federal government accumulated during its operations in the country.
Nigeria has turned its focus to Binance and other cryptocurrency platforms as it endeavors to mitigate its worst economic crisis in three decades and rebuild trust in its weakened currency.
In the midst of the currency manipulations controversy, security agencies, working alongside officials from the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), have restricted web access to cryptocurrency exchanges.
Also, two Binance executives who travelled to Abuja to discuss the crackdown were detained. Following the dispute, Binance has removed the naira for trading on its platforms.
Reports suggest that the detained executives are being held at a guest house in Abuja near the national security adviser’s office, with their phones and passports confiscated upon detention.
As of March 5, 2024, Binance was finally able to establish contact with the detained executives, a week after their detention, yet they remain uncharged in court.
The federal government had secured authorisation to detain both Binance executives for a period of 14 days, a term that expired on Tuesday, according to reports from the Financial Times.
The crackdown on Binance ensued from ongoing investigations into the country’s foreign exchange market, which had reportedly endured years of distortions, manipulations, and speculations, ultimately resulting in the continuous weakening of the Naira against major currencies, particularly the US dollar, in recent times.
During the recently concluded meeting of the Monetary Policy Committee (MPC), CBN Governor Mr. Olayemi Cardoso defended the central bank’s recent crackdown on cryptocurrency platforms, specifically Binance.
He asserted that Binance facilitated speculative activities against the Naira through its platform.
Cardoso elaborated that unidentified users accessed $26 billion on the platform in 2023, highlighting the potential implications for monetary policy, particularly the risk of exacerbating inflation and further weakening the Naira.
He also noted indications of illicit inflows and suspicious transactions, emphasising the CBN’s duty to shield Nigerians from the disruptive activities of such crypto platforms.
He highlighted that the apex bank was working in conjunction with various agencies, including the EFCC, police, and the Office of the NSA, to clamp down on the alleged economic saboteurs.
He stated that, “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows.
“In the case of Binance, in the last year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.
“There is a lot that is going on now as a result of collaboration between the different agencies which includes the EFCC and the police, and of course, the Office of the NSA and in due course, as we progress and have more information to share, we will certainly share but suffice to say that we are determined to do everything it takes to ensure that we take charge of our market and do not allow others to manipulate our markets in a way that ends up distortionary.
“We will not accept it. And we will do everything possible to prevent any of these kinds of infractions from taking place.”
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