The Abuja Division of the Federal High Court has made a significant decision in the ongoing investigation into alleged money laundering and terrorism financing activities on Binance, a prominent cryptocurrency exchange platform.
The presiding judge, Justice Emeka Nwite, granted an interim order compelling Binance Holdings Limited to furnish the Economic and Financial Crimes Commission (EFCC) with comprehensive data on all Nigerian traders using its platform.
“The applicant’s application dated and filed 29th February, 2024, is hereby granted as prayed. That an order of this honourable court is hereby made directing the operators of Binance to provide the commission with comprehensive data/information relating to all persons from Nigeria trading on its platform,” the judge ordered.
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This order, issued following an ex parte motion moved by the EFCC’s legal representative, Ekele Iheanacho, aims to provide crucial information to the anti-graft agency for its investigation. The ex parte motion marked FHC/ABJ/CS/259/2024 was brought pursuant to Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the Economic and Financial Crimes Establishment Act, 2004 and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and the inherent powers of the court.
Justice Nwite’s ruling mandates Binance to disclose detailed information on Nigerian users trading on its platform.
This development comes in the wake of an affidavit filed by Hamma Bello, an EFCC operative attached to the Special Investigation Team (SIT) of the commission, which operates under the Office of the National Security Adviser (ONSA). According to Bello’s deposition, intelligence received by the SIT indicated illicit activities, including money laundering and terrorism financing, being carried out on the Binance platform.
“The team uncovered users who have been using the platform for price discovery, confirmation, and market manipulation, which has caused tremendous distortions in the market, resulting in the Naira losing its values against other currencies,” stated Bello.
Bello further disclosed that Binance had been notified of these issues and was urged to cooperate with the investigation by delisting the Naira and providing detailed information on Nigerian users’ activities. According to data provided by Binance to the ONSA, Nigerian trading volume on the platform in 2023 alone amounted to $21.6 million.
Bello emphasized the urgency and public significance of the matter, stating that the data requested would facilitate the commission’s investigative efforts. He argued that granting the application was crucial for the interests of justice, as denying it would significantly impede the commission’s investigation.
Last week, the Federal Government sought an extension of the detention of two Binance officials, Tigran Gambaryan and Nadeem Anjarwalla, who have been held since their arrest about two weeks.
This move has attracted criticism from various quarters, including Bright Johnson, a Lagos-based tech analyst specializing in cryptocurrency growth.
Speaking at a press conference in Lagos on Friday, he criticized the apparent targeting of crypto exchanges by Nigerian authorities, suggesting they are being made scapegoats for the recent devaluation of the naira against the US dollar and the country’s soaring inflation rate, which has surpassed 20 percent.
He argued that targeting cryptocurrency exchanges like Binance and detaining their executives could undermine the government’s efforts to address economic challenges such as inflation and currency devaluation.
“The real leverage the government holds is not the detainment of two foreign nationals, but rather the immense appeal of Nigeria as Africa’s largest and leading economy. The simple fact is that crypto businesses want to operate in the Nigerian market because of its economic importance and until recently, its relatively amenable policies toward crypto adoption by both individuals and businesses.
“Crypto exchanges are not the cause of Nigeria’s economic and inflation woes; this stems from more deeply entrenched policy challenges, global headwinds impacting commodity prices, and other macroeconomic factors beyond the control of any single company. Blaming Binance and seeking to penalize it with dramatic actions like the detention creates an adversarial climate that will deter investment rather than encourage productive engagement,” he said.