April 19, 2024
Binance Under Fire: Central Bank of Nigeria Head Voices Concern, Executives Detained
Policy & Regulation

Binance Under Fire: Central Bank of Nigeria Head Voices Concern, Executives Detained

Binance finds itself under intensified scrutiny in Nigeria following allegations of “suspicious flows” of funds through its Nigerian arm in 2023. This was revealed by Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), during a press briefing on February 27.

Expressing concern over the situation, CBN head Olayemi Cardoso highlighted the perceived risks associated with crypto exchanges in Nigeria, stating, “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities, suspicious flows at best.” Cardoso further disclosed alarming figures regarding Binance Nigeria, noting, “In the case of Binance, in the last year alone, $26bn has passed through Nigeria from sources and users who we cannot adequately identify.”

The response to these concerns has been swift, with collaborative efforts between various government agencies, including the Economic and Financial Crimes Commission (EFCC), the police, and the office of the National Security Adviser (NSA), to address the issue. Reports have surfaced indicating that two Binance executives, citizens of the United States and the United Kingdom, have been detained and had their passports confiscated by the office of the NSA in Abuja.

The situation escalated on February 21 when internet access to Binance and several other cryptocurrency exchanges was blocked in Nigeria, following allegations by presidential adviser Bayo Onanuga of currency manipulation by crypto exchanges. Binance had already taken preemptive measures by imposing restrictions on Tether trading in Nigeria on February 20, in an apparent effort to appease regulators.

According to reports, the ban on crypto exchanges extended to platforms such as Forextime, OctaFX, Crypto, FXTM, Coinbase, and Kraken on February 27. This development coincided with the Nigerian naira hitting an all-time low against the U.S. dollar on the same day, adding further fuel to the ongoing debate surrounding cryptocurrency regulation in the country.

Despite the heightened scrutiny, the CBN lifted a two-year ban on banks engaging in crypto transactions in December, issuing guidelines for regulating virtual asset service providers concurrently. Additionally, Nigeria made headlines in 2022 as the second country to launch a central bank digital currency, with the Africa Stablecoin Consortium introducing the naira-pegged cNGN stablecoin in a CBN regulator sandbox earlier this month.

As regulatory pressures mount and investigations continue, the cryptocurrency landscape in Nigeria remains in flux, with stakeholders closely monitoring developments and implications for the broader financial ecosystem.

Image: Wallpapers.com

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