The Nigerian government has taken a bold step, demanding a substantial compensation of almost $10 billion from the cryptocurrency giant Binance. This move comes amid allegations of exchange rate manipulation, which has significantly impacted the value of the country’s currency, the naira.
According to government officials, Binance’s actions in currency speculation and rate-fixing have contributed to the naira’s depreciation, resulting in a loss of nearly 70% of its value in recent months. This alarming revelation has prompted swift action from Nigerian authorities, including the arrest of two Binance executives earlier this week.
Despite repeated requests for comment, Binance has remained silent on the matter. The Nigerian government’s accusations are serious, with concerns raised about the alleged movement of $26 billion worth of untraceable funds by Binance Nigeria.
Experts weigh in on the situation, highlighting the magnitude of the allegations and their potential impact on Nigeria’s economy. Tilewa Adebajo from CFG Advisory describes the accusations as weighty, considering the substantial sum involved, which exceeds the annual Nigeria diaspora remittances.
Cryptocurrency transactions in Nigeria have surged in recent years, with the country emerging as one of the world’s largest cryptocurrency markets. However, firms operating in this space are required to register with the government, a requirement that Binance allegedly failed to meet.
The Nigerian government’s crackdown on cryptocurrency firms is not limited to Binance alone. Several other platforms, including Coinbase, Kraken, and Forextime, have faced suspensions in recent weeks as authorities strive to stabilize the naira’s value.
In addition to exchange rate concerns, the government has raised issues of money laundering and terrorism financing associated with cryptocurrency use. The anonymity afforded by digital currencies has drawn scrutiny, with reports indicating illicit flows on various cryptocurrency platforms in Nigeria.
To address the currency devaluation crisis, Nigeria has implemented measures such as closing thousands of bureaux de change. The central bank’s efforts to stabilize the naira have become increasingly urgent, given the currency’s significant depreciation over the past year, exacerbating the cost-of-living crisis in the country.
As Nigeria grapples with economic challenges, including soaring food and commodity prices, the government’s actions against Binance underscore its commitment to safeguarding the nation’s financial stability and curbing illicit financial activities in the cryptocurrency space.
