The move comes as part of an ongoing crackdown, with Nigerian authorities pressing Binance to provide crucial information on its top 100 users and their transaction history over the past six months.
The request, outlined in a report by the Financial Times on March 13th, also includes a demand for Binance to address any outstanding tax liabilities.
The national security adviser’s office in Nigeria contends that Binance, along with other crypto platforms, played a pivotal role in manipulating the local currency, the Nigerian naira, leading to a substantial decline.
Bayo Onanuga, the presidential adviser on information and strategy, accused Binance of adversely affecting the Nigerian economy and suggested a potential ban on such platforms within the country. In an attempt to engage in dialogue, Binance found itself in a precarious situation, resulting in the detention of two senior executives, Tigran Gambaryan and Nadeem Anjarwalla.
Lol. If a company ceases NGN related services, it means they’re dusting their hands off Nigeria and anything concerning Nigeria. That you can use it to do other trading activities doesn’t imply they still exist in your country.
— Your favorite Veterinarian (@jaybrizzy) March 5, 2024
Despite Binance’s efforts to cooperate with Nigerian authorities, including delisting all naira transactions and discontinuing peer-to-peer naira transactions in late February, the executives remain in detention. Onanuga hinted that Nigeria may seek a $10 billion fine as retribution for the perceived economic impact caused by Binance.
The national security adviser’s office urged patience, stating, “Let’s allow law enforcement agencies space and time to undertake their work. Outcomes will be made public in due course.” Meanwhile, Binance has declined to comment on the specific allegations by Nigerian authorities, asserting that the exchange did not exit Nigeria but instead removed all naira trading pairs and transactions.
Concerns have arisen among online users about Binance’s ability to continue servicing users in Nigeria, given the cessation of naira-related services. One commenter questioned whether this move indicates Binance distancing itself from Nigeria and its concerns.
Nigeria has rapidly emerged as one of the world’s fastest-growing crypto economies, securing its position as the second-largest in terms of crypto adoption in 2023. In August 2022, the country was identified as the most crypto-obsessed globally, based on Google searches for terms like “cryptocurrency” or “buy crypto.”
The situation is further complicated by Nigeria’s decision to abandon its long-standing currency peg in June 2023, allowing the naira to trade freely. This move, however, led to record-high inflation, with consumer inflation rising for the 13th consecutive month in January 2024 to nearly 30%, according to data from the National Bureau of Statistics.