Nigeria and Binance: the legal war has begun...

According to a Financial Times article, Nigerian authorities have requested Binance to provide data on the top 100 Nigerian users and the entire transaction history of the last six months. The Nigerian government may also demand a $10 billion fine, believing that the exchange has "severely harmed" the local economy. Authorities argue that Binance facilitated "illegal transactions" at the expense of the nation.

A Rift Between Binance and Nigeria

Additionally, the Abuja government is pushing Binance to address any outstanding tax debts. This request comes amid negotiations between the two parties, with Nigerian officials claiming that the exchange's activities have negatively impacted the local currency, the naira. Binance, along with other cryptocurrency platforms, has emerged as an alternative means to establish unofficial exchange rates for the naira amidst the country's deep economic crisis. President Bola Tinubu's administration implemented a series of market-friendly reforms and devalued the currency to attract foreign investments. However, inflation has risen to 30%, prompting the government to crack down on cryptocurrency exchanges.

Bayo Onanuga, presidential adviser for information and strategy, has accused Binance and other crypto platforms of manipulating the local currency, contributing to its significant decline and even suggesting the possibility of banning such platforms in the country.

Executives Behind Bars

In this battle against crypto, Nigerian authorities have also blocked access to cryptocurrency websites and arrested two Binance executives – Nadeem Anjarwalla and Tigran Gambaryan – who traveled to Abuja to discuss regulatory crackdowns. In response, Binance has removed the naira from its trading platform. The arrests of the two executives took place in Abuja, and their phones and passports were confiscated. Despite being treated well, they remain in detention at least until March 20 (following a court decision), although no charges have been filed against them, to the extent that it is not unreasonable to call them "hostages."

Onanuga stated that Gambaryan and Anjarwalla are cooperating with Nigerian authorities and providing significant information. He also hinted at the possibility of Nigeria imposing a $10 billion fine in retaliation for the alleged negative impact on the economy.

Tigran Gambaryan, who leads Binance's criminal investigations team, is an American citizen, while British-Kenyan Nadeem Anjarwalla is Binance's regional head for Africa based in Kenya. According to local sources, they are not in prison but confined to a government property in Nigeria's capital. The families of Gambaryan and Anjarwalla have expressed deep concern and frustration over the lack of information and uncertainty surrounding the situation.

Despite visits from a US State Department official and a representative from the UK Foreign Ministry, the situation has not been resolved, and talks with the two executives have always taken place in the presence of Nigerian government guards.

Naira Hits Record Lows

The official Nigerian currency has further plummeted to 1,607 per $1 today, reflecting a loss of value exceeding 200% in the past year. Many Nigerians are facing one of the worst economic crises in the West African country in recent years, caused by rampant inflation, a result of monetary policies that have pushed the currency to historic lows against the dollar. The situation has sparked anger and protests across the country.

Governor of the Central Bank of Nigeria, Olayemi Cardoso, revealed that $26 billion from unidentified sources had passed through Binance in the last twelve months, fueling concerns about the impact of cryptocurrency trading on the economy.

Binance has avoided commenting on the details of the Nigerian authorities' allegations. However, a spokesperson clarified that the exchange has not completely abandoned Nigeria but has halted all trading pairs and transactions related to the naira.