Nigeria fines Binance $10 billion amid crypto crackdown
Cryptocurrency exchange Binance has been fined $10 billion by the Nigerian government, which accuses the platform of illegal transactions that have negatively impacted the country’s economy. The fine was announced by Bayo Onanuga, special adviser on information and strategy to President Bola Tinubu, during a BBC interview on March 1, 2024. This action follows the recent removal of the Nigerian naira from Binance’s peer-to-peer (P2P) trading service and the detention of two Binance executives in Nigeria. The Nigerian government is demanding compensation for alleged financial damages and is seeking to stabilize the local currency amid concerns over the devaluation of the naira and high inflation rates.
The Nigerian government’s crackdown on Binance and other cryptocurrency platforms is part of a global effort to regulate the crypto market and address illicit financial activities. The fine comes after Binance agreed to pay $4.3 billion to the US Department of Justice to settle criminal money laundering charges in November 2023. Binance has stated its commitment to removing users involved in manipulative practices and cooperating with local authorities to resolve compliance issues. Despite the regulatory challenges, Nigeria’s young and tech-savvy population continues to show strong interest in cryptocurrencies.
The removal of the naira from Binance’s P2P service has caused discontent among Nigerian users, as the platform was popular for direct trading between buyers and sellers without intermediaries. The Nigerian Securities and Exchange Commission (SEC) declared Binance’s operations illegal in 2023 due to its lack of registration in the country. The Central Bank of Nigeria (CBN) has also expressed concerns about suspicious fund flows through Binance Nigeria, reporting that $26 billion had passed through the country via Binance in 2023 from unidentified sources.
Local crypto analysts have criticized the Nigerian government’s approach to cryptocurrency regulation, suggesting that the focus should be on promoting manufacturing and exporting rather than antagonizing the crypto industry. Despite a previous ban on banks engaging in crypto transactions, the CBN lifted the ban in December and issued guidelines for regulating virtual asset service providers.