Nigeria’s Department of State Security has detained two unidentified executives from the global crypto exchange Binance as the country investigates alleged market manipulation, according to DLNews. The authorities also confiscated the passports of the executives; an American and a British citizen.
In response to the detention of its executives in Nigeria, Binance has suspended trading of the Nigerian naira against Bitcoin and Tether on its platform. Binance is yet to comment on the issue.
Nigeria’s central bank governor, Olayemi Cardoso, raised concerns on Tuesday about illicit financial activities potentially happening through crypto exchanges like Binance. He stated that “certain practices” suggest “illicit flows” and “suspicious flows at best” through these platforms. Specifically, Cardoso pointed to Binance Nigeria, alleging that $26 billion moved through the platform in the past year from unidentified sources and users.
“We are moving to a very aggressive regulatory environment,” the CBN governor disclosed during a press briefing following the 293rd Meeting of the Monetary Policy Committee. Cardoso also disclosed that it is collaborating with other agencies like the Securities Exchange Commission (SEC), the police, and the anti-graft commission, to investigate the crypto market.
These developments follow the Nigerian Communications Commission’s (NCC), the country’s telecoms regulator, recent order instructing internet service providers to block access to cryptocurrency exchange websites like Binance, Kraken, and Coinbase.
This isn’t the first regulatory skirmish between Binance and Nigeria. In June 2023, the SEC labelled Binance an illegal entity. While Binance denied any connection to the implicated “Binance Nigeria Limited,” the SEC clarified its stance by referencing Binance’s official website in a subsequent circular.
“Binance exploited loopholes when coming into Nigeria,” says Rume Ophi, executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria. Cardoso said, “We are determined to do everything it takes to ensure that we do not allow others to manipulate our market.”
Outside Nigeria, Binance faced a $4.3 billion penalty after admitting guilt to US criminal charges involving money laundering and sanctions violations.
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