- March 1, 2024
- Posted by: [email protected]
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The Nigerian government has imposed a staggering $10 billion fine on Binance for alleged cryptocurrency activity. The punitive measure aims to address concerns related to the stability of the nation’s local currency and alleged malpractices within the cryptocurrency market. Bayo Onanuga, President Bola Tinubu’s special adviser on information and strategy, revealed the imposing fine in a recent BBC interview, detailing the government’s stance on Binance’s activities.
According to Onanuga, Binance is accused of profiting significantly from what authorities label as “illegal transactions” in Nigeria, contributing to substantial financial losses for the country. This comes as the Office of the National Security Adviser (ONSA) steps up its scrutiny of cryptocurrency platforms, launching an interagency investigation into Binance’s operations. The investigation aims to uncover any potential threats or risks posed by the platform to the nation’s economic stability and security.
Earlier in the week, Nigerian authorities detained two top executives from Binance who had flown into the country for negotiations amid the ongoing regulatory crackdown. Unfortunately, the talks hit an impasse as Binance officials declined to meet certain demands put forth by the government. The executives faced accusations of operating a business worth billions without the requisite registrations and documentation.
The Nigerian authorities demanded that Binance submit full data on transactions involving the Nigerian naira on its platform for the last seven years. Additionally, authorities sought the removal of specific data related to Nigeria from the platform. However, Binance executives insisted on being taken to their respective countries’ embassies before complying with these requests, adding a layer of complexity to the negotiations.
Crucially, Onanuga stated that Binance is not registered in Nigeria and lacks a physical presence in the country. He alleged that the platform facilitated arbitrage trading at dollar-naira rates, adversely affecting the value of the local currency. Despite these allegations, Onanuga noted that Binance had been cooperating with the Nigerian government by providing information and had taken proactive measures such as suspending naira-related transactions on its platform.
The government’s stringent actions against Binance and other cryptocurrency firms are rooted in concerns over continuous market manipulation and illicit fund movements, both of which are perceived to contribute to the depreciation of the Nigerian Naira. In a significant move last September, Nigeria’s Securities and Exchange Commission (SEC) declared Binance Nigeria Limited illegal, citing its lack of registration and regulation by the commission.
It is crucial to highlight Binance’s past legal entanglements, including a guilty plea to criminal money laundering charges brought by the U.S. Department of Justice. As part of the settlement, Binance agreed to pay a substantial $4.3 billion, and its founder and CEO, Changpeng Zhao (CZ), also pleaded guilty, committing to step down from his position. However, CZ’s criminal trial has been postponed to April 30 by a U.S. court.
The Nigerian government’s insistence on a colossal $10 billion fine underscores its determination to address and rectify concerns surrounding cryptocurrency activities within the country. This unfolding situation reflects the increasingly complex relationship between traditional regulatory frameworks and the dynamic world of digital currencies.
