- Binance is still restructuring from the ground up following the approval of its $4.32 billion guilty plea in the US and upcoming sentencing of its former CEO, Changpeng “CZ” Zhao.
- However, the cryptocurrency exchange got entangled with another set of financial regulators again as the Nigerian government is shaking them down to fork out $10 billion in compensation for its alleged market manipulation that has supposedly impacted the naira.
- The cryptocurrency exchange will no longer support any transaction involving the naira by March 8.
$10 Billion Demand from Binance
Last week, two senior executives of the world’s number one crypto exchange were detained and had their passports confiscated by Nigerian authorities. The names of the officials were withheld but it has been clear all along that the country’s Central Bank Governor Olayemi Michael Cardoso had his sights on their firm as of late.
This comes amid the plummeting value of the Nigerian naira. Last month, FitchRatings downgraded 12 Nigerian banks as the naira fell by 40%.
The Nigerian central bank earlier blamed US dollar shortage for the record lows of their currency. Meanwhile, others attributed it to rampant corruption, which has been eroding every level of the West African nation’s governance structure.
Just last month though, Cardoso had found a way to conveniently shift the blame on Binance. He cited $26 billion worth of anonymous transactions that were processed by the crypto exchange as the cause of his concern.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best,” said the central bank head. “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.”
Following the $4.32 billion plea bargain of Binance in the US, President Bola Tinubu’s administration is now asking them $10 billion as compensation for their alleged foreign exchange manipulation through currency speculation and rate fixing involving the naira.
No More Transactions Involving the Naira
Binance is yet to act on the demand of the Nigerian government, but it already halted deposits using the naira on Tuesday. By 8:00 AM UTC on Friday, withdrawals using the currency will no longer be processed.
Users with naira in their balance will have their holdings converted to Tether (USDT) beyond the Friday deadline. The conversion will be calculated based on the USDT/NGN trading pair’s average closing price in the past seven days on Binance Spot.