Binance, a prominent cryptocurrency exchange, is facing a hefty $10 billion fine imposed by the Nigerian government. The government alleges that Binance’s actions have contributed to a significant devaluation of the Nigerian naira (NGN).
According to a recent report from the BBC, Bayo Onanuga, a journalist and special adviser on information & strategy for the Nigerian president, provided details about the fine. He stated that Binance enabled individuals to carry out “illegal transactions” on its trading platform.
Earlier this week, Binance’s peer-to-peer (P2P) feature for the NGN currency was taken offline. The government claims that Nigerian P2P traders on Binance were responsible for setting the exchange rate for the USD/NGN pair. For instance, last week, $1 was traded for over ₦1,800. Since Binance’s P2P feature for Nigerians was disabled, the exchange rate has rebalanced, and $1 now trades for around ₦1,600.
Onanuga explained to the BBC that these actions by Nigerian crypto traders on Binance, along with other factors, have led to a nearly 70% crash in the naira over the past few months. He emphasized that the Central Bank of Nigeria (CBN), the country’s sovereign bank, is the only entity authorized to determine the exchange rate against any foreign currency.
Highlighting Binance’s responsibility in the situation, Onanuga stated during a recent meeting, CBN governor Olayemi Cardoso disclosed that Nigerians had traded $26 billion through Binance’s P2P feature in a year.
This is not the first time that Binance has faced multi-billion-dollar fines from a government. A few months ago, the exchange was penalized a staggering $4.3 billion by U.S. authorities for criminal offenses. As part of the settlement, Binance’s founder, Changpeng Zhao (CZ), stepped down as CEO.
In another development, a report from the Financial Times revealed that two senior Binance officials were recently arrested, and their passports were confiscated by the Nigerian government. These officials had flown into Nigeria last week when the government imposed a ban on crypto trading websites. The ban remains in effect at present.
