In a significant escalation of its efforts to curb illegality in the financial sector, Nigeria has turned its focus towards Binance, the world’s largest cryptocurrency exchange platform.
Last month, the authorities had restricted the platform’s services as part of its crackdown on digital currency transactions. This move was followed by the extended detention of two high-ranking Binance executives.
A report from the Financial Times reveals that Nigerian authorities are aggressively pursuing detailed information from Binance, including data on the platform’s top 100 users within the country and comprehensive transaction histories spanning the past six months. These demands form a crucial component of ongoing negotiations between the government and Binance, with officials citing concerns about the exchange’s impact on the stability of the national currency, the naira.
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The specified timeframe of the past six months assumes heightened significance against the backdrop of Nigeria’s recent currency devaluation, underscoring the urgency with which authorities are seeking to address perceived threats to financial stability.
Additionally, documents obtained by the Financial Times indicate that Nigeria’s national security adviser’s office is pressing Binance to settle any outstanding tax obligations, reflecting the government’s multifaceted approach to regulating the cryptocurrency sector.
The intensified scrutiny of Binance comes amidst Nigeria’s most severe economic crisis in three decades, prompting policymakers to take decisive action to restore confidence in the national currency. Last month, authorities implemented restrictions on web access to cryptocurrency exchanges and detained the two senior Binance executives who had traveled to Abuja for discussions related to regulatory compliance.
The detained executives, identified as Nadeem Anjarwalla and Tigran Gambaryan, play integral roles in Binance’s operations across Africa. Nadeem, a UK citizen, serves as the regional manager for Africa at Binance, while Tigran, a former US Internal Revenue Service special agent, heads Binance’s financial crime compliance department.
Held in custody at a guest house in Abuja adjacent to the national security adviser’s office, both executives had their phones and passports confiscated upon detention, with initial contact only established a week later on March 5.
Binance has issued a statement affirming its collaboration with Nigerian authorities to facilitate the safe return of the detained executives to their families.
“While it is inappropriate for us to comment on the substance of the claims at this time, we can say that we are working collaboratively with Nigerian authorities to bring Nadeem and Tigran back home to their families,” the exchange said in a statement.
Their detention is in line with broader government efforts to stabilize the naira and mitigate perceived risks associated with cryptocurrency transactions.
A court order granting Nigeria’s anti-corruption agency permission to detain the Binance executives for 14 days expired on Tuesday, with a scheduled hearing regarding a potential extension postponed until Wednesday, according to the FT. This delay prolongs the uncertainty surrounding the fate of the executives, further complicating ongoing negotiations between authorities and Binance.
Bayo Onanuga, a special adviser to the Nigerian government, who had earlier accused Binance of negatively impacting the country’s economy and proposed a $10bn fine, said the two men were “cooperating” with Nigerian authorities and providing a “lot of information.”
“Let’s allow law enforcement agencies space and time to undertake their work. Outcomes will be made public in due course,” the office of the National Security Adviser told the FT.
The unfolding situation underpins Nigeria’s growing assertiveness in addressing challenges posed by cryptocurrency platforms. Olayemi Cardoso, Nigeria’s central bank governor, has raised concerns about the significant flow of funds through Binance, amounting to approximately $26 billion over the past year.
However, many believe that Binance is being scapegoated and that the government’s actions may likely deter foreign investors.
“I’m sure there was a lot of currency speculation going on on Binance,” said one tech entrepreneur familiar with the matter. “But that’s like blaming the messenger. All Binance did was facilitate peer-to-peer transactions without determining the price people were willing to pay.”
Despite mounting international concerns and frustrations expressed by the families of the detained executives, Nigerian officials remain steadfast in their quest to extract the said information from Binance.
Response from the families of the detainees indicates that their governments are not doing enough for their freedom. However, a statement from the British Foreign Office said, “We are supporting a British man detained in Nigeria and are in contact with the local authorities,” while the US Embassy in Abuja told the FT it was aware of “reports of detention of a US citizen” and that the State Department always works to “provide all appropriate assistance.”