Cryptocurrency exchanges in Nigeria are facing a serious crackdown, with two top executives from Binance detained over allegations of currency manipulation and illegal fund movements. The move is part of a broader effort to stabilize the foreign exchange market and protect the local currency, the naira.
Binance is not only in hot water, it’s practically boiling. Here are all the details you should know.
Binance Execs Detained?
In a highly intense drama, Premium Times reported that Nigerian authorities detained Binance executives after they flew into the country to negotiate amid a broader crackdown on crypto platforms, including Binance, Kraken, and Coinbase. Concerns about crypto platforms being used for criminal activities and their impact on the naira have prompted regulatory action, despite warnings from the Nigeria Securities and Exchange Commission.
Stalled negotiations between Binance and Nigerian officials, coupled with demands for transaction data and embassy involvement, led to the detention of the executives for at least twelve days. This marks a significant escalation in the ongoing battle between regulators and crypto platforms.
Also Read: Binance Admits to Violations, Settles for Record $4.3 Billion Penalty in US Crackdown
Playing the Blame Game
Before the detentions, Nigerian officials, including Bayo Onanuga, a special adviser to President Bola Ahmed Tinubu, accused Binance of contributing to the rapid decline of the naira. The Nigerian Communications Commission directed telecom companies to restrict access to Binance, Coinbase, and Kraken websites for residents.
Investigations are Ongoing
The Central Bank of Nigeria raised alarms over $26 billion flowing through Binance Nigeria in a year, expressing concerns about illicit financial activities. Governor Olayemi Cardoso revealed a collaborative investigation involving Nigeria’s anti-corruption wing, the police, and the national security advisor’s office. Authorities are now seeking a comprehensive list of all Binance users in Nigeria.
”in the case of Binance, In the last one year, 26 billion dollars has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
CBN Governor, Olayemi Cardoso pic.twitter.com/A6O2wlsY5M
— Channels Television (@channelstv) February 27, 2024
The heart of the crackdown lies in Binance’s peer-to-peer (P2P) trading method, which allows direct transactions without intermediaries. Concerns arise when individuals sell USDT at inflated prices in Nigeria, impacting the naira. Binance responded by disabling its P2P feature, preventing Nigerian users from transacting among themselves. There are rumors that the USDT/naira trading option may have been removed.
Did You Know? Nigerian Authorities Announces Ban on Crypto Exchanges to Save Naira
The Future Remains Uncertain
As investigations continue and regulatory pressure mounts, the future of crypto trading in Nigeria remains uncertain. This development reflects broader global debates on crypto regulations and their potential impact on financial stability.
The once-thriving crypto landscape in Nigeria now stands at a crossroads, awaiting resolution in the clash between regulators and industry giants.
Related: Coinbase CEO Refutes Claims of Banning Nigerian Users, Confirms No Government Directives Received
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Elena R
Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing – accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.
