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The Federal Government has reportedly detained two senior executives of Binance, a cryptocurrency exchange company.
According to Financial Times, the executives flew into Nigeria on Sunday following a ban on their website. They were arrested by officials in the Office of the National Security Adviser and their passports seized.
Binance is an online exchange where users can trade cryptocurrencies.
Nigeria is one of the largest peer-to-peer cryptocurency markets in the world. Between July 2022 and June 2023, cryptocurency transactions in the country reached $56.7 billion, according to Chainalysis.
The arrest of th executives came amidst efforts by the government to rein in speculation on the naira by cracking down on cryptocurrency exchanges.
Recently, the government through the Nigerian Communications Commission blocked the online platforms of Binance and other crypto firms to avert what it described as continuous manipulation of the forex market and illicit movement of funds.
It also sent operatives of the Economic and Financial Crimes Commission to arrest Bureau De Change operators at the Popular Wuse Zone 4 in Abuja.
At a press briefing on Tuesday, the Central Bank of Nigeria (CBN) Governor, Dr Yemi Cardoso, indicted Binance while discussing the funds flowing through crypto exchanges.
“We are concerned that certain practices go on that indicate illicit flows going through a number of these crypto platforms and suspicious flows at best.
“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,” he said.
According to Cardoso, Nigeria’s anti-corruption agency, police and national security adviser were co-ordinating an investigation into cryptocurrency exchanges.
The authorities were demanding to see a list of Binance’s Nigerian users since its inception, Financial Times quoted a person familiar with the matter.
In June 2023, the Securities and Exchange Commission said the operation of Binance Nigeria Limited, a subsidiary of Binance, was illegal.
He had called for a ban on Binance and other crypto platforms operating in Nigeria to curb foreign exchange rate distortions.
Meanwhile, a presidential spokesperson, Bayo Onanuga, has stated that cryptocurrency trading website Binance may destroy the Nigerian economy by arbitrarily fixing foreign exchange rate if not stopped.
While confirming that the government has taken strict action against the website, Onanuga stressed that the saboteurs used the cyberspace to dictate “even our exchange rate, hijacking the role of the CBN.”
Onanuga, who spoke on Channels Television programme, ‘Politics Today’, on Wednesday, said: “If we don’t clamp down on Binance, Binance will destroy the economy of this country. They just fix the rate.
“We have saboteurs. Look at what Binance is doing to our economy. That is why the government moved against Binance. Some people sit down using the cyberspace to dictate even our exchange rate, hijacking the role of the CBN.
“They just sit down and fix anything they like. It’s sabotage and we are trying to prevent that from happening henceforth.”
The presidential aide further urged Nigerians to stop patronising the parallel market for FX rates, saying the website of the apex bank was the only legal platform.
“The parallel market is not the real gauge of Nigeria’s economic health. The parallel market is an illegal market.
“I don’t even know why Nigerians and the media are feeding on the parallel market. That is not where we should go; what’s the CBN rate? As at Friday, the rate for the dollar was about N1600.
“Even in the so-called parallel market, the exchange rate is stabilizing there and that is what this needs. Our economy is too much dollarised. Importers are looking at the exchange rate and using it to fix prices, some of them arbitrarily, some of them actually profiteering,” Onanuga said.
According to him, once the CBN succeeds in stabilising the exchange rate, the prices of goods in the country will normalise.
“Things are not going to get worse, they are going to get better in the next few weeks,” he added.