Nigeria Seeks User Information from Binance in Cryptocurrency Enforcement Action

Nigerian officials have allegedly asked Binance, the largest cryptocurrency exchange, to supply details regarding its top 100 users in Nigeria, along with a complete transaction history for the last six months, as reported by the Financial Times on Tuesday.

Nigeria may pursue a $10 billion penalty against Binance as compensation, as the nation believes the exchange has significantly disrupted the local economy. Authorities have claimed that the cryptocurrency platform facilitated “illegal transactions” detrimental to the country.

Nigeria Presses Binance for Information Amid Detention of Executives

The Financial Times reported on March 13 that Nigerian authorities are also pressing Binance to resolve any pending tax obligations. This request arises during ongoing discussions between Binance and Nigeria, with the government asserting that Binance’s activities have notably affected the local currency, the Nigerian naira.

Binance, along with other cryptocurrency exchanges, has become a means for establishing unofficial exchange rates for the naira amid Nigeria’s economic turmoil. President Bola Tinubu’s administration has enacted market-friendly reforms and devalued the currency to draw foreign investment. However, inflation has soared to nearly 30%, leading the government to intensify its scrutiny of cryptocurrency exchanges.

Additionally, Bayo Onanuga, the presidential adviser on information and strategy, accused Binance and other crypto platforms of manipulating the naira, resulting in a significant depreciation of the local fiat currency. Onanuga indicated that banning platforms like Binance in the country could be a possibility.

Last month, Nigerian authorities restricted access to cryptocurrency websites and detained two Binance executives who had traveled to Abuja to discuss regulatory measures. This action followed Binance’s efforts to engage with Nigerian officials by sending two senior executives, Nadeem Anjarwalla and Tigran Gambaryan, who play crucial roles in Binance’s operations in Africa. In response, Binance removed the naira from its trading platform.

However, the two executives were detained and are currently held in Abuja, with their phones and passports confiscated. Although they are reportedly being treated well, they remain in custody without charges, described by sources as “simply hostages.”

Onanuga mentioned that Gambaryan and Anjarwalla are cooperating with Nigerian authorities and providing valuable information. He suggested that Nigeria might impose a $10 billion fine as retribution for the alleged adverse effects on the economy.

Binance Faces Scrutiny in Nigeria as Central Bank Raises Concerns Over Cryptocurrency Transactions

Nigeria’s Central Bank Governor, Olayemi Cardoso, revealed that $26 billion had been transacted through Binance in the past year from unidentified sources, raising concerns about the implications of cryptocurrency trading on the economy.

While the Office of the National Security Adviser assured that law enforcement agencies are actively addressing the situation, Elahe Anjarwalla expressed frustration over the perceived lack of proactive support from the British government for her husband, a British citizen.

In response, the Foreign Office confirmed it was in communication with local authorities regarding the detention of the British citizen in Nigeria. Similarly, the US Embassy in Abuja acknowledged awareness of reports concerning the detention of a US citizen, reaffirming its commitment to providing appropriate assistance.

The FT referenced a court order that permitted the detention of the Binance executives for 14 days, concluding Tuesday, with an extension hearing scheduled for Wednesday.

Binance has chosen not to comment on the specifics of the allegations made by Nigerian authorities. However, a spokesperson clarified that the exchange had not completely exited Nigeria but had ceased all naira-related trading pairs and transactions.

Online reactions to Binance’s decision to stop naira transactions reflect concerns regarding the exchange’s ongoing operations in Nigeria. Some speculate that halting naira-related services could signify a withdrawal from the Nigerian market.

Nigeria has become a notable player in the global cryptocurrency economy, experiencing significant growth in recent years and high adoption rates. However, the country has encountered economic difficulties, including record-high inflation following the abandonment of its currency peg in June 2023. As of January 2024, consumer inflation in Nigeria has risen for the 13th consecutive month, approaching 30%.

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