On Friday, Nigeria levied a $10 billion fine against Binance, the leading global crypto exchange, citing allegations that the platform has played a pivotal role in devaluing the Nigerian currency. According to an exclusive report by BBC, this move comes in response to claims that the exchange’s activities have led to a nearly 70% depreciation of the Naira in recent times, largely due to speculative exchange rate manipulations.
Binance Hit With Massive Fine
Bayo Onanuga, speaking on behalf of President Bola Tinubu’s administration, laid bare the government’s grievances, asserting, “The platform fixes the exchange rate for the country and it is an illegal rate. The CBN is the only authority that can fix the exchange rate for the country.”
He further elucidated the adverse effects of the activities, stating, “Binance platform harbors people who fix the exchange rate which quickly affects the Nigerian economy at a time when Nigeria is trying to stabilize the economy.”
The situation escalated with the recent arrest of two foreign Binance executives, who are currently under interrogation for serious allegations, including aiding in money laundering and financing terrorism.
Central Bank of Nigeria Governor Olayemi Cardoso disclosed, “About $26 billion passed through Binance Nigeria in cryptocurrency trades […] many of the trades for cryptocurrency are through sources and users that we cannot adequately identify,” highlighting the opaque nature of transactions that the platform facilitates.
Despite the controversy, Onanuga acknowledged that the exchanges’ staff are beginning to cooperate with the investigation, emphasizing the lack of formal registration of Binance and similar cryptocurrency entities under Nigerian law. He stated, “Binance and other crypto companies are not registered according to our laws […] They go to the Security Exchange Commission (SEC) so they can have a presence in Nigeria.”
The government’s stance is clear, with Onanuga articulating the severity of the situation: “The government is asking for a small amount of money, we are asking for close to $10 billion in damages that almost messed up our economy in a very short time.”
As investigations continue, the future of Binance’s operations in Nigeria hangs in the balance. Zakari Mijinyawa, head of the press department of the Office of the National Security Adviser to the President, provided a cautious outlook: “The officers are undergoing questioning under the investigation by the security agencies over the regulation of the currency exchange market […] discussions and agreements are ongoing with Binance officials, and they are cooperating.”
At press time, the BNB price did not show any severe reaction to the news, trading at $407.6.
Featured image from CNBC, chart from TradingView.com