Nigeria Detains Binance Execs, Demands Top 100 Users' Data: Is Crypto Destabilizing The Naira?

Mar 13, 202416:31 UTC

In an ongoing investigation that has seen the detention of two high-ranking officials from the cryptocurrency exchange Binance, Nigeria is intensifying its scrutiny by demanding detailed information on the exchange's top 100 Nigerian users and their transaction histories over the past six months.

What Happened: This inquiry is a pivotal aspect of the discussions between Binance and Nigerian authorities, who view the cryptocurrency giant as a significant factor in the challenges facing the stabilization of the Nigerian currency, The Financial Times reported.

The naira is currently undergoing a significant devaluation process.

The report stated that Nigeria's national security adviser's office is not only seeking transaction data but is also urging Binance to settle any unresolved tax obligations.

This move is part of a broader strategy by Nigeria to mitigate what is considered the country's most severe economic downturn in 30 years, aiming to rejuvenate confidence in the naira, which has been severely affected.

Under President Bola Tinubu's administration, Nigeria has embarked on extensive market reforms designed to draw foreign investment and has undertaken a significant devaluation of its currency.

This economic strategy, however, has led to soaring inflation rates, hitting a near 30-year peak at 29.9%.

Against this economic backdrop, cryptocurrency platforms like Binance have become popular alternatives for determining the naira's unofficial rate, with Binance being the largest such marketplace.

The tension escalated last month when Nigerian authorities restricted access to cryptocurrency exchanges online and detained two Binance executives who had arrived in Abuja to negotiate about the ongoing crackdown.

Following these events, Binance has ceased trading in the naira on its platform.

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The detained executives, Nadeem Anjarwalla, a British national who serves as Binance's Regional Manager for Africa, and Tigran Gambaryan, a former special agent with the U.S. Internal Revenue Service and now head of Binance's financial crime compliance, are key figures in Binance's operations within Africa.

Olayemi Cardoso, the governor of Nigeria’s central bank, highlighted last month that Binance had processed transactions worth $26 billion in the past year, originating from sources that the authorities "cannot adequately identify."

The identities of the detained executives were not disclosed by Cardoso.

The Nigerian government's decision last June to end a long-standing currency peg has led to a market-driven valuation of the naira against the dollar.

However, Bayo Onanuga, a special adviser to President Tinubu, criticized Binance last month for negatively impacting the Nigerian economy and accused the company of usurping the central bank's role in setting exchange rates.

At the time of writing, Binance Coin was trading at $583.40, up 7.7% over the past 24 hours, as reported by Benzinga Pro.

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