Nigerian officials have called for a $10 billion penalty against Binance BNB/USD, alleging that the platform caused substantial financial losses within the country by manipulating exchange rates.
What Happened: The government accuses Binance, one of the world's largest cryptocurrency exchanges, of contributing to a sharp increase in foreign exchange rates, which has led to the Naira plummeting by nearly 70% in recent months, BBC reported.
Bayo Onanuga, a spokesperson for President Bola Tinubu, highlighted the alleged detrimental impact of Binance's operations on Nigeria's economy, saying, “The platform is fixing the exchange rate in the country at an illegal rate. The CBN is the only authority that can fix exchange rates in the country.”
Onanuga further criticized Binance for facilitating activities that undermine Nigeria's economic stabilization efforts, saying, “Binance platform harbors people who are fixing the exchange rate, which quickly affects the Nigerian economy at a time when Nigeria is trying to stabilize the economy.”
The Nigerian government on Thursday confirmed the arrest of two foreign Binance executives, who are currently being interrogated by security agencies on charges including money laundering and financing terrorism, among other allegations.
Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), disclosed that approximately $26 billion had been transacted through Binance Nigeria in cryptocurrency trades, with many of these trades originating from "sources and users that we cannot adequately identify."
Despite the disruption caused to the economy, Onanuga noted that Binance officials have begun cooperating with the government, providing essential information to aid the investigation.
He told the BBC Newsday program, “Binance staff are cooperating with the government to provide information.”
Onanuga also pointed out that Binance and other cryptocurrency companies are not registered according to Nigerian laws.
Despite the CBN lifting the ban on cryptocurrency in 2023, he emphasized the need for these entities to be registered with the Security Exchange Commission (SEC) to operate legally within Nigeria.
“Government says if they want to operate in Nigeria, they have to register. The government is in talks with them, and they are providing a lot of information. The Naira is no longer on their platform, and no one can conduct Naira transactions on their platform,” Onanuga added, highlighting the government's stance on legal compliance.
The government's demand for nearly $10 billion in damages underscores the severity of the situation, with Onanuga asserting, “The government is asking for a small amount of money, we are asking for close to $10 billion in damages which almost messed up our economy in a very short time.”
What's Next: As the investigation continues, Zakari Mijinyawa, head of the press department at the Office of the National Security Adviser to the President, confirmed that the executives are under investigation and that discussions with Binance officials are ongoing.
However, details regarding the duration of the investigation and the specifics of the discussions remain undisclosed.
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