Nigerian authorities have arrested two top-ranking Binance officials amidst the government’s intensified efforts to regulate cryptocurrency trading platforms.
In light of Nigeria’s recent crackdown on cryptocurrency exchanges, the executives journeyed to the country, only to find themselves detained by the national security adviser’s office, as reported by Africa Today News, New York, with their passports taken away.
The enforcement action comes in the wake of a surge in the use of various cryptocurrency websites for trading the Nigerian currency, which has been grappling with persistent dollar shortages.
Since the currency was devalued last month for the second time in less than a year, the official exchange rate of the naira has been hovering around levels similar to those of the parallel market.
Nigeria finds itself in the grip of debilitating dollar shortages, driving its currency to unprecedented lows, as foreign investors retreated in the wake of a prior oil price crash and the imposition of capital controls in 2015.
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On Tuesday Olayemi Cardoso, Nigeria’s central bank governor, named Binance at a press conference while discussing the funds flowing through crypto exchanges.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best,” Cardoso told reporters. “In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify,” he added.
According to Cardoso, Nigeria’s anti-corruption agency, police, and national security adviser are joining forces to conduct an inquiry into cryptocurrency exchanges. An individual familiar with the matter disclosed that the authorities are insisting on obtaining a complete roster of Binance’s Nigerian users from the beginning of its operations.
In a recent development, the telecoms regulator mandated telecom companies to block access to major cryptocurrency exchanges like Binance, Coinbase, and Kraken.
President Bola Tinubu’s administration is fervently courting foreign investment to uplift Nigeria’s struggling economy through a set of market-oriented reforms.
These initiatives aim to streamline Nigeria’s complex system of multiple exchange rates and abolish its years-long currency peg. Remarkably, the government has devalued the naira twice in the span of eight months.