Naira Removed from Binance as Nigerian Authorities Seek $10 Billion

Key Takeaways

• Nigerian authorities are seeking billions in compensation from Binance.
• The exchange is accused of manipulating Nigerian markets and damaging the national economy.
• Binance has delisted the Nigerian Naira from its P2P platform.

Binance has removed the Nigerian currency, the Naira, from its peer-to-peer (P2P) market feature amid claims from Nigerian authorities that the platform contributed to the devaluation of the Naira.

In addition, the Nigerian government is now seeking $10 billion in damages as Binance also stands accused of profiting from “illegal transactions” at the expense of the country, further undermining Nigeria’s troubled economy. So why is Binance in such big trouble?

Billions Sought From Binance

In an interview with the BBC , Bayo Unanuga, special advisor on information and strategy to President Bola Tinubu, made public that the Nigerian government is demanding compensation from Binance somewhere to the tune of $10 billion.

According to Onanuga, Binance has profited from conducting illegal transactions whilst the nation struggled through huge economic losses. According to local media , top officials have opened an interagency investigation into the exchange. This comes shortly after the Central Bank of Nigeria (CBN) governor alleged that $26 billion of potentially illicit funds had “passed through Binance Nigeria.

Just last year, Binance agreed to settle a $4.3 billion lawsuit with the U.S. Securities and Exchange Commission. The exchange pleaded guilty to violations relating to anti-money laundering, unlicensed money transmitting, and others in November 2023, which may give Nigerian authorities legal precedent to leverage against Binance.

It’s worth noting that in July 2023 , the Securities and Exchange Commission (SEC), Nigeria, declared Binance’s operations illegal as they are an unregistered and unregulated entity.

Naira Delisted From Binance P2P

In his interview, Onanuga also reiterated  his accusations that Binance had manipulated the market by placing caps on traders selling Tether (USDT) for the Naira equivalent, stating:

“The platform fixes the exchange rate for the country and it is an illegal rate. The CBN is the only authority that can fix the exchange rate for the country,” Onanuga said, adding, “Binance platform harbors people who fix the exchange rate which quickly affects the Nigerian economy for the time when Nigeria is trying to stabilize the economy.”

Onanuga confirmed that Binance was cooperating with their investigations, which appears to be true given that within a very short space of time, Binance removed the Naira from its P2P currency options.

However, this leaves one other, and rather significant loose end remaining. What happened to Binance executives who were detained in Nigeria within this same period?

Binance Nigeria Accusations

The news comes a day or so after Nigerian authorities detained two senior executives from Binance, who were reportedly there to discuss various pain problems, and seized their passports.

The American and British duo were reportedly visiting the country to negotiate with regulators as they began to crackdown on Binance and other crypto platforms in the country. According to local media , negotiations were at a deadlock as the officials declined to meet some of Nigeria’s demands.

Notably, authorities have requested that Binance provide 7-years worth of transaction data relating to the Naira and demanded that “other data” related to Nigeria be deleted from Binance. Again, there has been no exact reasoning as to why they have been detained, but officials have obtained a 12-day warrant to detain the two.

Together, all of these issues spell more trouble ahead for Binance as it navigates multiple lawsuits and other regulatory problems around the world. Last year alone Binance began pulling out of multiple European nations such as the United Kingdom, Cyprus, the Netherlands, Belgium, and others throughout 2023 as new regulations entered into force.