Binance Under Fire: Global Regulatory Crackdown Hits Hard in Nigeria

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In a bold move that has sent shockwaves through the crypto world, Nigeria has escalated its crackdown on digital currency exchanges, singling out Binance, the globe-trotting crypto behemoth, in an audacious bid to curb naira speculation. The African giant’s latest actions include detaining two of Binance‘s top brass and confiscating their passports, a dramatic escalation in the state’s war on crypto, the Financial Times reports.

This crackdown isn’t just a local skirmish but a glaring spotlight on Binance‘s growing list of troubles with regulatory bodies worldwide. The detention of Binance executives upon their arrival in Nigeria—following the country’s ban on several crypto trading platforms—underscores a tumultuous relationship between the exchange and global regulators.

Nigeria’s aggressive stance against crypto platforms comes in the wake of the naira’s rapid devaluation, which has propelled inflation to a staggering 29.9%, the highest in nearly three decades. Cryptocurrency sites, offering an alternative trading venue and establishing an unofficial price for the Nigerian currency, have now been thrust into the government’s crosshairs. In response to the detentions, Binance promptly suspended trading of the naira against bitcoin and tether on its platform.

The narrative thickened at a press conference where Olayemi Cardoso, Nigeria’s central bank governor, explicitly named Binance while expressing concerns over “illicit flows” and “suspicious flows” through crypto exchanges. Cardoso’s alarming revelation that a whopping $26 billion has passed through Binance Nigeria without adequate user identification has only added fuel to the fire, prompting an investigation coordinated by Nigeria’s anti-corruption agency, police, and national security adviser.

The saga extends beyond Nigeria’s borders, with last week’s directive from the telecoms regulator to telecoms companies to block access to leading cryptocurrency exchanges, including Binance, Coinbase, and Kraken. This marks a significant blow to Binance‘s operations and its efforts to rehabilitate its image amid a series of market-friendly reforms aimed at attracting overseas investment to Nigeria’s floundering economy.

The controversy surrounding Binance is not confined to Nigeria. The company’s recent history is marred by a $4.3bn settlement with US authorities over criminal charges related to money laundering and violating international sanctions. The departure of Changpeng Zhao, its former CEO, after pleading guilty to money laundering charges, signals deep-rooted issues within the organization.

Adding insult to injury, Bayo Onanuga, a special adviser to President Bola Tinubu, accused Binance of “blatantly” setting the exchange rate for Nigeria, usurping the central bank’s role in currency rate setting. This allegation not only questions Binance’s operational ethics but also highlights the potential for cryptocurrency exchanges to disrupt national monetary policies.

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