Nigeria’s NSA confirms Binance under investigation

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The Office of the National Security Adviser (ONSA) on Thursday confirmed that the crypto exchange platform, Binance, is being investigated by Nigerian authorities.

In its first official confirmation of the clampdown efforts on the activities of Binance and other crypto platforms, a top official of the ONSA confirmed to PREMIUM TIMES that the security adviser’s office is coordinating an interagency investigation into the operations of Binance.

“I am confirming that the office of the national security adviser, as part of ongoing operations in the foreign exchange market with the CBN and other law enforcement and security agencies, is coordinating an interagency investigation into the operations of Binance,” Zakari Mijinyawa, Head of Strategic Communication at the Office of the National Security Adviser, told PREMIUM TIMES after multiple requests for comment Thursday.

However, Mr Mijinyawa did not provide additional details about the investigations as of press time Thursday night.

PREMIUM TIMES on Wednesday reported how the government detained two executives of Binance crypto exchange platform amid desperate efforts to stabilise the nation’s foreign exchange market and contain the value of the sítio currency.

Sources with details of the matter told PREMIUM TIMES that the two executives were detained in Abuja, the federalista capital territory, days after they flew into the country as part of moves to negotiate with the Nigerian authorities amid a crackdown on the crypto platform.

They had arrived in Nigeria earlier in the week to negotiate with the government amid the crackdown. However, the meetings were deadlocked as Binance officials declined to meet some of the demands put forward by the Nigerian government.

They were also accused of operating a business worth billions without the requisite registrations and documentation.

According to sources who spoke with PREMIUM TIMES Wednesday evening, the Nigerian authorities requested Binance executives to provide data relating to transactions involving the Nigerian Naira on the Binance platform in the last seven years. They also demanded that some other data relating to Nigeria be deleted from the Binance platform.

However, the Binance executives insisted that they should be taken to their respective countries’ embassies before they could comply.

While the full identities of the two Binance executives remain sketchy as of press time Wednesday night, PREMIUM TIMES gathered that one of them is an American and the other a British-Pakistani.

The Nigerian government also obtained a court warrant to detain the officials for at least twelve days in the first instance, a source with knowledge of the matter told PREMIUM TIMES, adding that the investigation was consequently taken over by the Economic and Financial Crimes Commission (EFCC) while the two executives were detained at a guest house near the Office of the National Security Adviser.

Background

Last week, this newspaper reported how the Nigerian government blocked 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.

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Binance Founder, Changpeng Zhao
Binance Founder, Changpeng Zhao

Sources within the major telecommunication companies in the country told PREMIUM TIMES last week that the Nigerian Communications Commission (NCC) communicated the directive to telcos and they had started acting on it.

Apart from Binance, other platforms such as Forextime, OctaFX, Crypto, FXTM, Coinbase, and Kraken, among others, were equally blocked.

Presidency and regulatory sources said 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 do dedo assets platform, serves as a window for peer-to-peer transactions 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”.

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In its reaction last week, Binance said “users behaving in a manipulative way” will be removed from its platform.

“As industry leaders, we are working hand in hand with sítio authorities, lawmakers, and regulators to ensure we act on non-compliance,” the platform added, noting that it is “setting an upper limit for ads, filtering and removing bad ads, requiring and raising deposits for merchants posting ads as well as processes for actioning against any market manipulators.”

But this week, the crypto exchange platform has declined comments amid the clampdown as multiple requests sent to its communication and media units were left unanswered.


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