- The Nigerian government just announced the arrest of two senior executives of Binance who were operating within its jurisdiction.
- Their apprehension came against the backdrop of the West African country’s strict clampdown on crypto trading and rising concerns about the naira’s rapid devaluation.
The Arrest of Senior Binance Officials
Binance is back in the spotlight again but for all the wrong reasons. According to the Financial Times, two senior officials of the company headed to Nigeria last week but were detained by authorities in connection to their crypto exchange operations. Their passports were likewise seized to prevent them from leaving the jurisdiction.
As of today, there’s still no available information about the names of the two key Binance officials and whether or not there were other staff from the company involved. The same can be said about the nature of their travel to Nigeria but it’s assumed that they were on official business there despite the administration of President Bola Tinubu’s declaration of a ban on cryptocurrency trading websites last week. What we only know is that they are currently held in the country’s administrative and political capital, Abuja.
Binance immediately stopped all forms of trading involving the naira at the height of rallying Bitcoin (BTC) and altcoin prices.
Probe by Nigerian Authorities
On Tuesday, Central Bank of Nigeria Governor Olayemi Michael “Yemi” Cardoso specifically mentioned Binance at a press conference as he talked about the threat posed by crypto exchanges to the naira.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best,” stated Cardoso during the press con. “In the case of Binance, in the last one year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
Cardoso added that the country’s anti-corruption authorities, police force, and national security officials are already probing the suspected illegal flow of funds in crypto exchanges. This came hot on the heels of the Tinubu administration’s orders for telecom operators to block access to all crypto-related businesses, particularly those of Binance, Kraken, and Coinbase.
The FT noted that Nigerian authorities are blaming crypto exchanges and related businesses as among the primary reasons for the plummeting value of the naira. They claimed the rampant trading in these entities has resulted in the establishment of an unofficial price for their domestic currency.
Currently, inflation in the West African nation soared by nearly 30%, which is the highest it had in around 30 years.
No Break for Binance
The bad news comes as Binance struggles to get back on its feet following its hefty $4.32 billion guilty plea in the US for anti-money laundering violations, breaking sanction laws, and operating an unlicensed business. It also comes ahead of former CEO Changpeng “CZ” Zhao’s scheduled sentencing in April.