The government of Nigeria says it is demanding a compensation of approximately $10 billion from Binance, one of the biggest crypto exchanges in the world.
Justifying the huge fine, Nigeria accused Binance of manipulating foreign exchange rates through rate-fixing, and foreign currency exchange rates. These actions by Binance have caused the Naira to lose an approximated 70% of its values in the last few months.
As a result, Nigerian authorities have arrested two senior Binance executives in the country.
Nigeria takes these actions seriously
Central bank governor, Olayemi Cardoso said that they have proof that Binance has moved $26b. The funds cannot be traced.
According to financial experts, the untraceable funds are a concern for the Western African nation. They are more than the annual Nigeria diaspora remittance, which is in the $24b region.
While cryptos are not illegal in the country, government regulations require firms to get official registration before operating there.
President Bola Tinubu came into office last year. He immediately ended the previous policy of pegging the Naira to the US Dollar. This move allowed merchants to sell and buy currency on rates determined by the market.
But according to special advisor to the government, Bayo Onanuga, the recent collapse of the Nigerian currency was not a result of market forces at work. He said the exchange rate suddenly went high, caused “…by the people on the Binance platform.”
Authorities also say that crypto is being used to finance terror activities. Nigeria is home to Boko Haram, an islamist terror group that has been fighting the government for decades.
Nigeria has suspended Binance and other crypto exchanges
Binance is one of the most popular crypto exchanges in the West African nation.
Now, the government has moved to suspend the operations of Binance and other crypto exchanges such as Kraken, Coinbase, FXTM, and several others. The suspensions are an effort by the government to stabilize their currency.
Due to the deteriorating economy, the country has experienced mass protests in recent weeks. The collapse of the Naira has caused high food and fuel prices, further causing pressure on the government, and its populace.
