Binance Executives Detained in Nigeria Amid Cryptocurrency Crackdown

Two senior executives of Binance have been arrested in Nigeria as the country enforces stringent measures against cryptocurrency exchanges, reports the Financial Times.

According to the publication’s sources, company representatives flew to Nigeria following the authorities’ decision to ban several digital asset trading sites. However, upon arrival, they were detained by the office of the national security adviser, who confiscated their passports.

The government turned its attention to crypto platforms after the rapid devaluation of the naira (NGN). In 2023, inflation in the country reached a thirty-year high of 29.9%.

Nigerian authorities believed that trading services exacerbated the local currency’s situation by creating their own unofficial NGN exchange rate.

Presidential adviser Bayo Onanuga confirmed that Binance was “clearly” setting local exchange rates for the naira and abusing the central bank’s role as the currency rate operator.

Following the detention, Binance halted bitcoin and USDT trading in pairs with NGN.

During a press conference, Central Bank of Nigeria Chairman Olayemi Cardoso discussed the impact of the largest cryptocurrency exchange by trading volume on the economy.

“We are concerned that certain practices indicating illicit flows continue through several [cryptocurrency platforms]. In the case of Binance, just in the past year, $26 billion has passed through its Nigerian branch from sources and users we cannot adequately identify,” he stated.

According to Cardoso, Nigeria’s anti-corruption agency, police, and national security office coordinated the investigation into such platforms. FT sources also reported that authorities demanded a list of Nigerian Binance users since the company’s entry into the jurisdiction.

Governments will blame everything but themselves! Yeah! Sure! It’s #Bitcoin that is causing inflation in Nigeria to surge to a 30-year high of 30%. https://t.co/HJii6uefpj

— Ali (@ali_charts) February 28, 2024

“Governments will blame everyone but themselves. Yeah, sure! It’s Bitcoin that caused inflation in Nigeria to reach a thirty-year high of 30%,” wrote crypto trader Ali.

The government has already ordered telecommunications companies to block access to certain exchanges, including Binance, Coinbase, and Kraken.

Last year, Nigeria’s central bank lifted the ban on cryptocurrency operations and announced the need to regulate the market.

However, restrictions on trading and storing digital assets remain in place for banks in the country, effective since February 2021.

Back in late 2022, media reported on the Nigerian government’s plans to pass a bill legalizing the use of Bitcoin and other digital assets.

Later, the local Securities and Exchange Commission announced its intention to allow asset-backed tokens. As a pilot project, the possibility of listing such tokens on licensed platforms was envisaged.