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Binance and Others in War with Nigeria Government
The Nigerian government is contemplating blocking online platforms such as Binance and other cryptocurrency firms to prevent what it perceives as ongoing manipulation of the forex market and illicit fund movements, according to officials familiar with the policy option, who spoke to PREMIUM TIMES.
The recent significant depreciation of the Nigerian currency has resulted in the naira plummeting to an all-time low of N1,800 to a dollar in the parallel market. Sources within the presidency and regulatory bodies indicate that the government has chosen to take action against Binance and other crypto firms following reports suggesting that currency speculators and money launderers exploit these platforms for criminal activities. Authorities believe that such activities on these platforms are significantly contributing to the devaluation of the naira.
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Binance, a digital assets platform, facilitates peer-to-peer transactions, allowing users to advertise their interest in selling or buying currencies of their choice. Despite the Securities and Exchange Commission (SEC) of Nigeria issuing a disclaimer on Binance Nigeria Limited in September 2023, stating that the platform is operating illegally in Nigeria, the firm continued its operations, attracting substantial patronage, particularly among urban youths, suspected speculators, and money launderers.
In addition to concerns about economic sabotage, officials also express national security worries, as these platforms are reportedly used by various criminal groups, including for ransom payments. Law enforcement sources reveal that digital asset platforms are frequently used to manipulate forex values through fake deals, either to artificially boost values or cause a decline.
An official at the Economic and Financial Crimes Commission (EFCC) involved in investigating criminal complaints against digital asset platforms, speaking on condition of anonymity, described the process as a “sophisticated heist against the Nigerian economy.” She explained that manipulators exploit simultaneous opening of buy and sell windows to create fake demand and mislead the market, thus artificially inflating the dollar’s value against the naira.
A senior executive at the Central Bank of Nigeria (CBN) expressed concern over the recent downward trend of the naira against the dollar, attributing it to artificial devaluation caused by speculative sites like Binance. He highlighted that trading on these platforms is encouraged by money launderers and terrorist financiers, contributing to the devaluation of the naira.
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Binance has faced similar accusations of currency manipulation and unethical conduct in many countries, resulting in sanctions and ongoing legal action in the United States. If the Nigerian government decides to ban digital asset trading platforms, it would follow the footsteps of countries like Malaysia, France, and Malta.
The Office of the National Security Adviser (ONSA) announced its collaboration with the Central Bank of Nigeria to crack down on currency speculators and economic saboteurs. The Head of Strategic Communication at ONSA, Zakari Mijinyawa, indicated that individuals and organizations engaged in wrongful activities in Nigeria’s forex market would be identified, investigated, and penalized.
Efforts to reach Mr. Mijinyawa for comment on the planned clampdown on Binance and other crypto firms were unsuccessful. Similarly, attempts to contact Binance for a response were unanswered.
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