NIGERIANS have expressed concerns over Binance’s official plans to stop its financial activities in Nigeria.
The company has officially withdrawn from Nigeria and suspended its activities on the naira.
Binance has been in the eye of the storm as the Nigerian government has severally accused it of ‘speculative and borderless activities’ that have an unofficial influence on its foreign exchange and currency problems.
Reports from chainanalysis revealed that Nigeria is also one of the world’s biggest crypto markets. Still, the Nigerian government demanded almost $10 billion in compensation from Binance, which it accused of manipulating foreign exchange rates via currency speculation and rate fixing, and arrested two of the firm’s senior executives last week.
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To buttress the Nigerian government’s stance, at the Monetary Policy Committee (MPC) meeting last week, the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso disclosed that more than $26bn was channeled through the Binance platform in the last year that could not be traced.
The Association of Bureau De Change Operators of Nigeria (ABCON) headed by Aminu Gwadabe also accused Binance of influencing the currency market because of its borderlessness in foreign exchange trading across borders.
“In Binance, there is more liquidity, and it is having a huge influence on Nigeria’s currency market. Binance is the anchor; for instance, it closed at over N1,500 last week Saturday and has been determining the market direction in Nigeria’s currency market,” Gwadabe told The ICIR.
The platform has also been fingered in a couple of investigations around the World. In November, the firm agreed to pay $4.3 billion in penalties after pleading guilty to criminal charges related to money laundering and violating international sanctions rules in United States,a report by Bloomberg has confirmed.
Questions remain about whether Binance could have done better regarding speculative activities on its platform. Some industry players believe those activities may have thrived because of a lack of regulation.
“An unregulated space is one of the most dangerous spaces out there. There is no way you can tell the difference between funny and sincere actors, “founder and coordinator of Blockchain Nigeria User Group, Chimezie Chuta said.
Chuta, however, argued that Nigeria’s currency crisis cannot be blamed on the speculative activities of the Binance company.
“The government is focusing on the wrong thing in their effort to tackle the naira issue, Binance cannot be the only cause of Nigeria’s currency problems, “he argued.
Meanwhile, a social critic and a former Senator of the Federal Republic of Nigeria, Shehu Sani, in his official X account said, “Cardoso has cordoned off Awoof market.”
Another user on X platform @healthdictive expressed concern over the movement of $26 billion in the economy without a trace from Binance, which he said could influence illicit financial flows.
“$26 billion was moved out of the economy without trace. Binance is a good medium for fraud-related activities,” the X user said.
Notably, this is not the first time the country has blamed a company for its currency woes. In 2021, the CBN accused ‘Abokifx’, a website that collates black market exchange rates of naira, of illegal activities that undermine the economy.
Recall, Godwin Emefiele, the then Governor of CBN said the platform’s publisher, Oniwinde Adedotun was involved in illegal forex trading. When the website was banned, the currency’s value was around N570/$. When Emefiele was suspended as governor in June 2023, the exchange rate was N750/$ in the parallel market.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.
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