The Nigerian government has set its sights on Binance, the world’s largest cryptocurrency exchanges, demanding a staggering $10 billion. This demand comes amid allegations of “illegal transactions” that purportedly benefited Binance at the expense of Nigeria’s economy.
Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, disclosed this significant financial demand during a BBC interview, marking a notable escalation in the government’s scrutiny of cryptocurrency operations within the country.
Nigeria’s investigation into Binance, spearheaded by the Office of the National Security Adviser, involves a collaborative effort among various agencies, including the Central Bank of Nigeria (CBN) and law enforcement bodies. The probe aims to dissect Binance’s involvement in the foreign exchange market, which has become a point of contention amid the nation’s financial turbulence.
In a reactive measure to the government’s clampdown, Binance has ceased offering the Nigerian naira on its peer-to-peer (P2P) trading platform. This feature had gained popularity in 2021 following the Nigerian government’s prohibition of cryptocurrency dealings, offering a workaround for local traders to continue engaging in crypto transactions.
The government’s intensified actions against crypto exchanges like Binance are unfolding against a backdrop of economic strain characterized by the naira’s devaluation and soaring inflation rates, which have surged to a near 30-year peak of 29.9%. Critics from within the local crypto community argue that the government’s adversarial stance towards cryptocurrencies is misguided and unlikely to rectify the underlying financial issues plaguing the nation.
Furthermore, Binance has come under fire for imposing a cap on the selling price of Tether (USDT) tokens on its P2P platform, a decision that has left traders unable to exceed a specific selling price. The exchange attributed this restriction to an automatic system halt, a clarification that contrasts with the suspicions of local crypto enthusiasts.
This controversy is not isolated to Binance alone; the crypto sector in Nigeria has faced governmental skepticism since the previous administration of President Muhammadu Buhari, which instituted a ban on crypto operations in an effort to stabilize the naira and tackle inflation. The tumultuous relationship between the Nigerian government and the crypto industry was further highlighted in 2022 when disgruntled customers of the troubled crypto exchange AAX besieged its local office, seeking refunds after the platform suspended operations.
