Binance Exits Nigeria, Government Launches Crypto Inquiry

Key Takeaways

• Binance to discontinue all Nigerian Naira services after March 8, 2024.
• The Nigerian government will now investigate the risks of crypto and its impact on national security.
• Nigerian authorities are still seeking $10 billion in damages from Binance

Nigerian authorities are launching an inquiry into the potential security implications of cryptocurrencies and digital asset transactions.

The news follows a series of troubling events for Binance in Nigeria as it stands accused of eroding the nation’s economy, as well as processing billions in potentially illicit funds, a set of allegations which has also seen two senior Binance executives currently detained in Nigeria.

Nigeria To Investigate Crypto

Following Binance’s announcement  to de-list and discontinue all Nigerian Naira services, the Nigerian government has resolved to probe into cryptocurrency security risks, as well as President Bola Tinubu’s administration and a perceived inconsistency when it comes to regulating crypto.

 

As per local outlet, the Premium Times , the Nigerian House of Representatives mandated the Committee on National Security and Intelligence to investigate pretty much every area of crypto and blockchain such as peer-to-peer (P2P) marketplaces, payment gateways, network infrastructure, and much more.

The resolution hopes to identify threats to national security as well as blindspots in legislative, legal, and regulatory frameworks that may be a detriment to the country.

The committee has been requested to engage “all relevant stakeholders”, and conduct thorough investigations into key players in the industry, with an additional investigation into the status of the nation’s central bank digital currency (CBDC), the E-Naira.

Binance Exits Nigeria

As per the official announcement  from Binance, the exchange will discontinue all Nigerian Naira spot trading pairs from March 7, 2024, and automatically convert all remaining Naira balances in user accounts to Tether (USDT) on March 8, 2024.

In addition, Binance P2P, Binance Convert, Binance Pay, and all other Naira services will all be ceased by March 8, 2024. The full schedule can be found here .

Binance stands accused of not only operating an unregistered company in Nigeria but is also alleged to have not only damaged the nation’s economy by capping Naira/USDT exchange rates, but also processed $26 billion of illicit funds through its Binance Nigeria arm.

As a result, Nigerian authorities are reportedly seeking $10 billion in damages whilst two of its senior executives remain detained in the country.

No Resolution in Sight

Nigerian authorities have evidently lost their patience with Binance, and appear to be employing a particularly heavy-handed approach when it comes to handling the crypto exchange.

At present, lawmakers are threatening  to issue an arrest warrant on the two executives it currently has detained following multiple requests to have Managing Director of Binance, Richard Teng, summoned to the Nigerian House of Representatives.

According to local reports , Binance has been sending its Nigerian lawyer to appear before the committee, which lawmakers in Nigeria have continued to reject, stating that Teng or any other senior management member “must appear before the committee.”

Interestingly, this is all taking place as the Central Bank of Nigeria (CBN) approves plans to pilot a new stablecoin, the compliant Naira (cNGN), and with no clear outcome in sight or public comment from Binance, matters remain murky at best.