The Nigerian government has hit cryptocurrency exchange platform Binance with a $10 billion fine, accusing it of engaging in “illegal transactions” that contributed to the devaluation of the Nigerian Naira. The move comes amid a wider crackdown on cryptocurrency activity in the country.
This news follows recent developments in Nigeria’s economic landscape and its relationship with cryptocurrency. Just months before, in February 2024, the Central Bank of Nigeria (CBN) issued a directive barring banks and other financial institutions from facilitating cryptocurrency transactions. This move was seen as a response to concerns about potential risks associated with cryptocurrencies, including money laundering and financial instability. source
Bayo Onanuga, a special advisor to President Bola Tinubu, stated in a BBC interview that the fine is a response to Binance’s alleged “illegal operations” that “contributed hugely to the devaluation of the country’s currency.” Mr. Onanuga accused Binance of facilitating the arbitrary setting of dollar-naira exchange rates on its platform, claiming these rates negatively impacted the official exchange rate and the Nigerian economy. He further asserted that Binance was not registered in Nigeria and that the platform “harbours people who fix the exchange rate.” source
Binance has yet to officially respond to the Nigerian government’s accusations and the imposed fine. However, it is important to note that this is not the first time the platform has faced similar allegations. In 2023, Binance agreed to pay $4.3 billion to settle criminal money laundering charges brought by the U.S. Department of Justice.
Experts remain divided on the Nigerian government’s claims. Some analysts believe the fine may be excessive and driven by a lack of understanding of the cryptocurrency market. Others acknowledge potential concerns about the impact of cryptocurrency trading on the stability of the Nigerian Naira but question the effectiveness of such a hefty fine as a solution.
The situation remains fluid, with the potential for further developments and legal challenges. The $10 billion fine is a significant amount, and it remains to be seen how Binance will respond to these accusations and the financial penalty. This incident also raises broader questions about the future of cryptocurrency regulation in Nigeria and the potential impact on the country’s financial system and relationship with international cryptocurrency platforms.