Abuja, Nigeria, Monday, March 11, 2024- Nigeria’s government has escalated tensions with cryptocurrency exchange Binance by demanding a hefty $10 billion in compensation. 1
Binance had neither confirmed nor refuted the report yet.
However, later reports quoted an official of the Nigerian government as refuting the report.
The Nigerian authorities accuse Binance of manipulating foreign exchange rates and contributing to the recent decline of the Nigerian naira.2
“We recently discussed ways to resolve issues with Nigeria, but we did not hear any demand for $10 billion,” a Binance official told a local news outlet.3
“Our aim is to chart a good relationship with the government and the people of Nigeria. We want to see our services restored in Nigeria very soon, but we have no intention of paying fines for personnel or services,” Binance added. At the same time, the Nigerian Government special adviser cited in the BBC article said that his statement was misrepresented.
“I said our government may impose heavy fines on Binance for what happened,” Mr Bayo Onanuga told The Gazette.
“I never said Binance had been informed about the fines or that it would definitely be $10 billion.
I only said the amount may be imposed, which is because nothing has been finalized yet,” Mr Onanuga said, placing repeated emphasis on the uncertainties around the fines. Cryptocurrency transactions amounting to about 12% of Nigeria’s GDP occurred in the year to June 2023. Binance and other cryptocurrency firms have faced suspensions in Nigeria in recent weeks, exacerbating the naira’s decline. The government also alleges that Cryptocurrency is used for money laundering and funding terrorism.
The Nigerian federal government has taken action against Binance, suspending its operations along with those of Coinbase, Kraken, Forextime, OctaFX, Crypto, and FXTM on allegations of ‘exchange rate manipulation.’ The naira has lost nearly 70% of its value in recent months, causing significant economic hardship for many Nigerians. The government alleges that Binance’s activities, specifically currency speculation and rate-fixing, have exacerbated the situation. Furthermore, Nigerian authorities have reportedly arrested two Binance executives. Binance has not yet responded publicly to the accusations or the arrests.
The $10 billion demand is a significant escalation, and it remains to be seen how Binance will respond.
The situation could have a ripple effect on the broader cryptocurrency market and could potentially lead to increased scrutiny of crypto exchanges by other governments.
The Nigerian central bank has been under pressure to stabilize the naira, which has seen a significant devaluation, contributing to a cost-of-living crisis and protests in the country.
- BBC.com: https://www.bbc.com/news/world-africa-68451238[↩]
- bitcoinke.io: https://bitcoinke.io/2024/03/nigeria-govt-may-impose-heavy-fines-on-binance/[↩]
- binance.com: https://www.binance.com/en/square/post/4851398409226[↩]
