The Nigerian government is considering blocking the online platforms of Binance and other crypto firms to avert what it considers continuous manipulation of the forex market and illicit movement of funds, officials with knowledge of the policy option have told PREMIUM TIMES.

The recent unprecedented weakening of the Nigerian currency has seen the naira falling to all-time low of N1,800 to a dollar in the parallel market.

Presidency and regulatory sources say the government decided to move against Binance and other crypto firms following reports that currency speculators and money launderers were using them to execute criminal activities. Authorities believe the ‘criminal activities’ going on on platforms are contributing significantly to the weakening of the naira.

Binance, a digital assets platform, serves as a window for peer to peer transaction allowing users to advertise interest to sell or buy currencies of their choice.

In September 2023, Nigeria’s Securities and Exchange Commission (SEC) placed a disclaimer on Binance Nigeria Limited, saying the platform was “neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal”.

Despite the warning by the regulatory agency, the firm continued its operation, attracting huge patronage especially among urban youths and suspected speculators and money launderers.

Aside suspicions of economic sabotage, officials also speak of national security concerns as the platforms are often patronised by other criminal groups including for payment of ransom.

Law enforcement sources say the digital asset platforms are also routinely deployed for manipulation of forex values through fake deals that serve to prop up values or cause a fall.

A source at the Economic and Financial Crimes Commission (EFCC) involved in probing criminal complaint against digital asset platforms, who was however not authorised to speak to the press, described the process as a “sophisticated heist against the Nigerian economy”.

According to her, by allowing simultaneous opening of buy and sell windows for a single user, manipulators often fake interest to sell dollars which they then buy at a speculated rate to themselves through the buy window.

“This therefore gives the dollar a fake value against the naira which then sets a frenzy and mislead the market. This fake price is then often quoted by BDCs who raise their prices to meet the Binance benchmark even without any corresponding demand in that segment," she said.

A senior executive at the Central Bank of Nigeria (CBN) described as “troubling” the bearish downward trade of the naira against the dollar in the last 10 days, attributing it to artificial devaluation caused by the speculative sites.

“Through manipulative rent seeking, Binance’s global reach results in higher USD to NGN exchange rates often being used as a benchmark for currency trading, misleadingly devaluing the Naira in global markets.”

But he added that trading on the platform is encouraged by activities of money-launderers and terrorist financiers “who have no qualms with the arbitrage”.

“We started noticing this sharp trend from February 9, and since then it has caused significant devaluation of the naira against the USD. This is simply criminal,” he said.

Binance has had similar accusations of currency manipulation and unethical conduct leading to sanctions in many countries and an ongoing lawsuit in the United States.

If the government decides to invoke a ban on the digital asset trading site it would be treading the path of countries like Malaysia, France and Malta, among others.

Contacted on Thursday night on the planned clampdown on Binance and other crypto firms, Mr Mijinyawa (The Head of Strategic Communication, Office of the National Security Adviser), said he was at an “important meeting”. He did not answer or return subsequent calls made to him.

Binance could not be reached Wednesday morning. Multiple calls to a customer service number listed for it rang out unanswered.

Zxcvbnmghtr:


But you haven't told us what the solution is, you have only been making noise. Empty vessel makes the loudest of noise.

Britishpea:


There are so many criminals in Nigeria hiding under some canopies. Govt can’t succeed if they don’t have the support of the citizens. People criticize them over everything without lauding any of their policies. The critics mostly are sponsored by the ones eating from the rots. And influencers have their ways of piercing through the minds of the weaklings.

Binance is used for money laundering fyi. Crypto firms mostly make their money from it. So BLord made so much money by selling and buying bitcoins ? Dey play!

Why did USA ban liberty reserve and e-gold back then?

Winning123:



Can you see how useless and clueless you and all the people that likes your comments. So France, Malaysia and other countries that ban it are clueless.

fergie001:


SOURCE

Nbote:
At this point, it is very very very very clear that these people are very very very very clueless. This is what you get when you bring in relics as leaders. Is Nigeria the only country using Binance? How can anyone who isn't a slowpoke claim Binance is a sophisticated heist against the economy