A federal high court in Abuja has ordered Binance Holdings Limited to provide the Economic and Financial Crimes Commission (EFCC) with the comprehensive data or information of all persons from Nigeria trading on its platform.
In the supporting affidavit sworn by an operative of the EFCC attached to the case it was stated that the investigation team received intelligence regarding alleged nefarious activities, including money laundering and terrorism financing, on the Binance cryptocurrency exchange platform.
After the Nigerian government's crackdown on crypto exchanges, Binance announced its exit from Nigeria last week, discontinuing all naira services starting from March 8. Although, apparently, this wasn't enough for the Nigerian authorities to bury the hatchet. Reportedly, they are now asking Binance to provide info on its top 100 users in the country, including all transaction history for the past six months, and resolve any outstanding tax liabilities.
Some users also expressed concern on Twitter that the crypto exchange has restricted at least 281 accounts belonging to Nigerian residents due to suspected “money laundering” activities. This comes as some other netizens react to the discontinuation of the BTCNGN pair on TradingView.
I am saddened to hear that Binance has restricted 281 accounts belonging to Nigerian residents due to Money laundering.
— Woye (@woye1) March 15, 2024
2: Binance’s team visited Nigeria twice in the 4th quarter and trained EFCC officials.
3: 626 information requests were received between June 2020 and Feb…
In addition to this, it has been reported that the country might seek to impose a $10 billion fine on the exchange because it “really messed up” Nigeria’s economy, according to the president's leading advisor, Bayo Onanuga. Sources say this is not a final fee, and the sum may change during negotiations.
In the last days of February, it was first reported that Nigeria’s Department of State Security detained two Binance senior executives; the government later confirmed that it made two arrests without providing the detainees' identities. It has since been revealed that Tigran Gambaryan, the head of Binance’s criminal investigations team, and Nadeem Anjarwalla, Binance's Kenya-based regional manager for Africa, have been detained at a guest house in Abuja without passports or phones since February 26, arguably being held as well-treated hostages. At the time of writing there has been no confirmation of whether the two face legal charges, but according to the Financial Times, a court order allowed Nigeria’s anti-corruption agency to detain both Binance executives for 14 days (which have already passed).
“While it is inappropriate for us to comment on the substance of the claims at this time, we can say that we are working collaboratively with Nigerian authorities to bring Nadeem and Tigran back home safely to their families.”
It is reported that neither the U.S. nor the British authorities are being particularly proactive in trying to free the duo. However, they are likely to be released if Binance provides the authorities with the information (and money) it wants.
The Nigerian government believes that crypto exchanges accelerated the rapid devaluation of the naira, establishing a ‘black-market’ price for the local currency and thus undermining government efforts to stabilize it. Onanuga even accused Binance of "blatantly setting exchange rate for Nigeria, hijacking CBN role."
Within a few days of this statement, the country decided to ban crypto exchange websites. The governor of the Central Bank of Nigeria later claimed that local authorities, including an anti-corruption agency, the police and a national security adviser, are currently investigating cryptocurrency exchanges. Special mention was made of Binance Nigeria, which authorities allege handled $26 billion dollars of funds from sources and users that they cannot adequately identify.
After the recent deactivation of all trading pairs involving the Nigerian naira (NGN) on Binance, local users have reportedly turned to direct peer-to-peer (P2P) trading on social platforms like Telegram and WhatsApp. It is reported that the current exchange rate for 1 USDT set by these users falls between 1550 and 1600.
Meanwhile, Nigerian crypto enthusiasts have responded with mockery to the authorities' attempts to curb the downward trend of the naira. They argue that banning exchanges like Binance and even revoking the operational licenses of 4173 Bureau de Change (BDC) operators has not led to any tangible improvements in the stability of the local currency.
The Nigerian methods might seem a bit barbaric in the eyes of the modern world, but they could quite possibly be effective. It is unclear what the Nigerian authorities will do if they get the information requested, but there could be legal consequences not only for the exchange but for its users as well. We will continue to observe the situation.
