Nigeria has detained two senior executives of Binance, one of the world’s largest cryptocurrency exchanges, over currency exchange manipulation on the company’s platform.
The crackdown comes amidst escalating concerns over the rampant devaluation of the naira, which has propelled inflation to a nearly three-decade high of 29.9%.
The detained executives flew to Nigeria in response to the government’s recent ban on several cryptocurrency trading platforms, only to find themselves detained by the office of the national security adviser, who also confiscated their passports.
While Binance has remained tight-lipped about the incident, Nigerian authorities have intensified their scrutiny of cryptocurrency exchanges as they seek to stem illicit financial flows and establish control over the nation’s monetary policy.
Nigeria’s central bank governor, Olayemi Cardoso has raised concerns over the flow of funds through crypto exchanges, citing $26 billion passing through Binance Nigeria in the past year alone from unidentifiable sources and users.
The government’s aggressive stance has prompted demands for detailed user lists from Binance since its inception, indicating a broader investigation into cryptocurrency activities within the country.
This crackdown marks a significant setback for Binance, which has been attempting to overhaul its internal operations following a $4.3 billion penalty imposed by US authorities for money laundering and sanctions violations.
The detention of its executives underscores the challenges cryptocurrency exchanges face in navigating regulatory landscapes worldwide, particularly in emerging markets like Nigeria where authorities are grappling with economic instability and currency devaluation.
As Nigeria intensifies its efforts to attract foreign investment and revitalize its struggling economy, the clash between regulatory oversight and the decentralized nature of cryptocurrencies underscores the complexities and tensions inherent in the global financial system.