Binance finds itself under severe scrutiny in Nigeria following a recent settlement with the U.S. Department of Justice (DOJ). Richard Teng, the new CEO of Binance, has been summoned to appear before Nigeria’s House of Representatives Committee on Financial Crimes. This development was confirmed on Friday, with the committee’s chairman, Ginger Onwusibe, issuing a stark ultimatum for Teng to make an appearance by March 4th to address allegations including money laundering and terrorism financing.
The Nigerian government says that Teng must appear before them to answer for an alleged $26 billion in illegal fund flows. Teng has repeatedly avoided meetings. Refusing to respond to the latest summons will result in litigation against the exchange.
The urgency of the committee’s request follows Binance‘s plea deal in the United States, where the exchange admitted to charges of money laundering and terrorism financing, agreeing to a historic fine of $4.3 billion and consenting to operate under monitoring conditions. The Nigerian committee, expressing frustration over Binance‘s previous non-compliance with their invitations, emphasized the serious nature of the accusations against the exchange and their commitment to safeguarding Nigerian citizens from financial crimes perpetrated by foreign entities.
In light of Nigeria’s economic challenges, including efforts to emerge from recession, the committee is also keen on ensuring that tax revenues are duly collected. Onwusibe highlighted Binance’s significant user base in Nigeria, estimated at over 10 million, and pointed out the exchange’s lack of physical presence in the country for user complaints and its failure to pay taxes locally.
Amidst these allegations, regulatory actions have escalated against Binance in Nigeria. The Nigerian Communications Commission (NCC) recently mandated telecom companies to restrict access to foreign crypto exchange websites, including Binance. Further, reports emerged of the detention of two Binance executives by Nigeria’s Department of State Security, signaling an intensive investigation into the exchange’s operations.
The Central Bank of Nigeria’s governor, Olayemi Cardoso, disclosed concerns over “suspicious flows” of money through Binance Nigeria, amounting to $26 billion in the past year, from unidentified sources. Additionally, amidst reports of the Nigerian government demanding $10 billion in compensation from Binance for alleged exchange rate manipulation, a Binance spokesperson indicated ongoing discussions with the government to address these issues. However, there appears to be confusion regarding the purported fine, with government advisor Bayo Onanuga clarifying misinterpretations of his comments to the BBC about the fine’s confirmation and Binance’s awareness of it.
This situation underscores the intensifying global regulatory focus on cryptocurrency exchanges and the significant challenges they face in navigating the complex legal and financial landscapes across different jurisdictions.
