The Nigerian government, which is demanding $10 billion from Binance, has alleged that the world’s largest cryptocurrency exchange operated illegally in the country.
Nigeria: Why Binance should pay $10B
The President’s aide accused Binance of profiting substantially from its “illegal transactions” in Nigeria while the nation suffered significant losses.
Nigeria cracks down on Binance
The crackdown on Binance intensified earlier this week when two executives of the platform were arrested upon their arrival in Nigeria. The arrests came after Nigeria’s decision to ban several cryptocurrency trading websites. The executives were detained by the office of the country’s national security adviser, and their passports were seized, according to reports.
Binance has already faced legal troubles elsewhere, having pleaded guilty in the United States to criminal money laundering charges and agreeing to settle for $4.3 billion. Its founder and CEO, Changpeng Zhao, also known as CZ, pleaded guilty and agreed to step down from his position.
In September 2023, Nigeria’s Securities and Exchange Commission (SEC) declared Binance Nigeria Limited as illegal, stating that it was neither registered nor regulated by the Commission. The Nigerian government subsequently blocked Binance and other crypto firms’ online platforms to prevent the manipulation of the forex market and illicit movement of funds.
Nigeria’s central bank governor, Olayemi Cardoso, expressed the government’s concerns stating, “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best,” he continued, “In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
Binance’s troubles with governments worldwide have been attributed to the opaqueness of cryptocurrencies, due to its nature not being understood and regulated. The demand of $10 billion announced by Mr Onanuga may be one of the largest demands made from the firm by a government.