What began as a rumor circulating on social media platforms such as Facebook, Twitter, and dark socials has now been confirmed in a recent report. Cryptocurrency markets are once again embroiled in controversy, with two senior executives from Binance, one of the world’s largest cryptocurrency exchanges, being detained in Nigeria.
This development coincides with Nigerian authorities ramping up efforts to stabilize the country’s currency, the naira, amidst worries about speculative trading, illicit financial activities, and the attempt to draw foreign direct investment (FDI) into the nation.
Per the report from the Financial Times, the detention of Binance executives follows Nigeria’s decision to ban several cryptocurrency trading websites, aiming to curb the volatile fluctuations of the naira. While the specifics of the detention remain unclear, reports suggest that the executives were apprehended by the office of the country’s national security adviser, with their passports seized.
The detention of Binance executives has sent shockwaves across the cryptocurrency community, leading to a halt in trading of the naira and USDT trading pair on the Binance exchange. This shows the difficulties that cryptocurrency platforms face in places with changing rules and regulations.
Nigeria’s government has shifted its focus towards cryptocurrency websites following a sharp devaluation of the naira, contributing to soaring inflation rates. The emergence of these websites can be attributed to the country’s struggling economy, characterized by high unemployment and underemployment rates.
In other news, the US and Nigeria rank 1st & 19th for active crypto users worldwide
In a recent meeting, the Governor of Nigeria’s Central Bank, Olayemi Cardoso, raised concerns about money flowing through crypto exchanges. He mentioned that $26 billion went through Binance Nigeria last year without clear sources or users. This has led to investigations by Nigeria’s anti-corruption agency, police, and national security adviser into crypto exchanges.
In a further crackdown, Nigeria’s telecoms regulator has ordered telecoms companies to block access to major cryptocurrency exchanges, including Binance, Coinbase, and Kraken. This directive aims to restrict the avenues for cryptocurrency trading within the country, aligning with broader efforts to curtail the volatile movement of the Naira.
TechCabal, a local media outlet, reported that the Nigerian authorities have remained tight-lipped about the arrest. A spokesperson for the NSA mentioned to TechCabal that he was unaware of the arrest, suggesting that it might have been carried out by different security organizations.
Lately, Binance has been in the news spotlight. The company recently settled with US authorities, agreeing to pay $4.3 billion in penalties related to money laundering and breaching international sanctions rules. Furthermore, Changpeng Zhao, the former CEO, admitted to a money laundering charge and stepped down from his role. The situation is now more intricate for Binance with its executives facing detention, adding to the regulatory challenges they are currently navigating.
In an interview, the Special Adviser to the President said that Binance is fixing the rate, and if it is not clamped down, Binance will destroy the economy of Nigeria.
