Two senior executives at Binance have been detained in Nigeria as the country intensifies its efforts to curb speculation on its currency, the Financial Times reported. This move followed Nigeria's recent ban on several cryptocurrency trading websites following the rapid devaluation of the naira and soaring inflation rates.
Cryptocurrency Crackdown in Nigeria
Nigeria's crackdown on cryptocurrency exchanges is due to a concern about the devaluation of the naira, which has contributed to a record-high inflation rate nearing 30%. Cryptocurrency websites have reportedly become an alternative platform for trading and establishing unofficial exchange rates for the naira. This has prompted Nigerian authorities to take action against these websites.
The detained executives traveled to Nigeria amid the ban but were detained by the office of the country's national security adviser upon arrival. Consequently, Binance suspended naira trading against Bitcoin and Tether on its platform. According to the FT, the Nigerian authorities seized the executives' passports.
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, expressed concerns about illicit financial flows through cryptocurrency exchanges, citing $26 billion passing through Binance Nigeria in a year. The government, including anti-corruption agencies and the police, is conducting an investigation into cryptocurrency exchanges.
Government's Concerns and Investigation
Recently, the advisor to the Nigerian President, Bola Tinubu, called for a ban on cryptocurrency platforms like Binance and KuCoin. Bayo Onanuga accused these platforms of manipulating the naira and contributing to its decline in the foreign exchange market. According to a report by Finance Magnates, Onanuga urged the Economic and Financial Crimes Commission and the Central Bank of Nigeria to take immediate action and halt the operations of cryptocurrency exchanges.
Onanuga highlighted Binance's past regulatory issues in other countries, questioning its ability to operate responsibly in Nigeria. However, Binance denied manipulating the naira, emphasizing its market-driven approach and commitment to fair and transparent operations.
In the past, Binance maintained its commitment to engaging with authorities and addressing regulatory concerns. However, how this stand-off will unfold and what impact it will have on the Nigerian crypto community remain to be seen.
Meanwhile, the sentencing of Changpeng Zhao, Binance's CEO, in a case involving money laundering charges was postponed until April 30. While the reason for the delay remains unclear, the development adds another layer of uncertainty to the saga surrounding Zhao and Binance's dealings with US regulators.
The US Department of Justice claims that Binance failed to comply with anti-money laundering regulations. In addition to Zhao's personal charges, Binance entered into a settlement with the DOJ for $4.3 billion, effectively shutting down its operations within the US.
This article was written by Jared Kirui at www.financemagnates.com.
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