Nigeria imposes hefty fine on Binance for alleged currency devaluation, arrests executives over money laundering and terrorism financing.
On Friday, Nigeria imposed a hefty $10 billion penalty on Binance, the world's leading cryptocurrency exchange. The Nigerian government alleges that Binance has significantly contributed to the devaluation of the Nigerian currency. According to a BBC report, this action was taken in response to accusations that the exchange's operations have led to a nearly 70% decline in the value of the Naira, primarily due to speculative manipulation of exchange rates.
Major Fine for Binance
Bayo Onanuga, speaking on behalf of President Bola Tinubu's administration, outlined the government's concerns, stating, "The platform sets the exchange rate for the country, and it is an unlawful rate. The CBN is the only authority that can set the exchange rate for the country."
He further explained the negative impacts of these activities, saying, "The Binance platform harbors individuals who manipulate the exchange rate, which has immediate adverse effects on the Nigerian economy at a time when Nigeria is working to stabilize its economy."
The situation escalated with the recent apprehension of two foreign Binance executives, who are currently being questioned for serious allegations, including aiding in money laundering and financing terrorism.
Olayemi Cardoso, Governor of the Central Bank of Nigeria, revealed, "Approximately $26 billion has passed through Binance Nigeria in cryptocurrency transactions […] many of these transactions involve sources and users that we cannot adequately identify," highlighting the opaque nature of the platform's transactions.
Despite the controversy, Onanuga acknowledged that the platform's 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 cryptocurrency companies are not registered according to our laws […] They need to go through the Securities and Exchange Commission (SEC) to operate in Nigeria."
The government's position is firm, with Onanuga expressing the gravity of the situation: "The government is not asking for a large sum of money, we are seeking nearly $10 billion in damages, which almost destabilized our economy in a very short period."