Amid Nigeria’s crackdown on cryptocurrency exchanges, two senior executives at Binance have been detained upon their arrival in the country.
The move comes after Nigeria’s recent decision to ban several cryptocurrency trading websites.
Reports from Reuters indicate that the executives were detained by the office of the country’s national security adviser, who seized their passports.
This crackdown follows the emergence of several cryptocurrency websites as popular platforms for trading the Nigerian currency, which has been plagued by chronic dollar shortages.
The naira’s official exchange rate has closely mirrored parallel market levels since being devalued last month, marking its second adjustment in less than a year.
Nigeria has been grappling with crippling dollar shortages, exacerbated by foreign investor flight following a previous oil price collapse and the introduction of capital controls in 2015.
During a press conference on Tuesday, Olayemi Cardoso, Nigeria’s central bank governor, singled out Binance while discussing funds flowing through crypto exchanges.
Cardoso expressed concerns about illicit and suspicious flows through these entities, highlighting that $26bn had passed through Binance Nigeria in the last year alone, from sources and users the authorities cannot adequately identify.
Vanguard quoted him as saying, “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best.”
“In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify,” Cardoso added.
As part of the investigation into cryptocurrency exchanges, Nigeria’s anti-corruption agency, police, and national security adviser are coordinating efforts.
Authorities are reportedly demanding a list of Binance’s Nigerian users since its inception.
Last week, Nigeria’s telecoms regulator ordered telecoms companies to block access to some of the world’s largest cryptocurrency exchanges, including Binance, Coinbase, and Kraken.
President Bola Tinubu’s government has been striving to attract overseas investment to revive the country’s struggling economy through market-friendly reforms.
These efforts include addressing the multiple exchange rates system and ending the years-long currency peg, resulting in two devaluations of the naira in eight months.
