8 months ago
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An ex-parte motion in Nigeria’s crackdown on Binance looks set to expose internal platform information to regulatory scrutiny.
A Federal High Court in Abuja, Nigeria’s capital, has ordered Binance to turn over data on all its exchange users to the Economic and Financial Crimes Commission (EFCC) in an investigation into suspected money laundering, foreign exchange rate manipulation, and terror financing.
In a March 18 court hearing, EFCC operative Hamma Bello said the agency’s Special Investigation Team was alerted to suspicious activity and petitioned the crypto exchange to cease all naira-related trading facilities.
Nigerian authorities initially requested up to six months of transaction history for the top 100 local users as part of the probe. However, the demand was expanded to include every Nigerian customer on the platform, but the scope of trading activity was unspecified.
Binance’s issues in Nigeria
The Abuja High Court order was disclosed nearly three weeks after Nigerian authorities arrested two Binance executives. Tigran Gambaryan and Nadeem Anjarwalla, the employees in question, were detained in the capital city on Feb. 26 following an invitation from regulatory bodies for dialogue.
Nigeria’s central bank governor, Olayemi Cardoso, stated that over $26 billion in untraceable wealth flowed through the world’s largest crypto exchange and supposedly contributed to the naira’s rapid decline since last year. Cardoso did not cite data on how this number was concluded.
The government also threatened to impose a $10 billion fine on Binance for facilitating foreign exchange manipulation by allowing users to swap naira for Tether’s stablecoin USDT en masse.
Binance responded by pointing to cooperation with the EFCC, Nigerian Police Force, and other law enforcement agencies since June 2020. The crypto exchange titan also urged local authorities to maintain a relationship with crypto stakeholders with a “proven track record of constructive collaboration”.
The saga comes after Binance settled its regulatory issues with the U.S. and paid $4.3 billion in penalties to the Department of Justice in a plea deal. Furthermore, founder Changpeng Zhao resigned from his position as CEO and was ordered to submit his Canadian passport while court proceedings advanced.
