Nigeria accused Binance of "indirectly" causing national losses, demanding $10 billion in compensati
Tensions between the Nigerian government and Binance are increasing, as the country's government is stepping up its crackdown on cryptocurrency exchanges.
According to news site DL News, Nigerian authorities have detained at least two Binance managers working in this country to serve the investigation process targeting the exchange. These two individuals have American and British nationality, and their passports were confiscated by the Nigerian Ministry of Security.
The Nigerian government has not yet issued an official statement on the nature of the investigation, nor the accusations placed on Binance.
Previously, the Nigerian Telecommunications Commission ordered carriers in the country to block connections to crypto exchanges, including Binance. These platforms were accused by the Nigerian cyber security agency of aiding and abetting currency and foreign exchange market manipulation.
Nigeria is having problems with foreign currency reserves and is said to be doing everything it can to limit the flow of money abroad, including increasing taxes on foreign workers, as well as closer monitoring of transaction activities. cryptocurrency.
During a press conference on February 27, Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, announced that in 2023, up to 26 billion USD in untraceable assets flowed through Binance's branch floor in the country. This.
Nigeria was one of the leading countries in cryptocurrency adoption in Africa, even implementing the CBDC initiative early. However, changes in the economic situation in this country are causing people to abandon their local currency and switch to crypto to avoid risks.
Binance in the past has been in trouble many times with Nigerian authorities. In mid-2023, the securities commission here accused the exchange of operating without a license.
Nigerian authorities have asked Binance to pay $10 billion in compensation for "indirectly" influencing the devaluation of the local currency Naira through cryptocurrency speculation.
After the news that Nigeria demanded a $10 billion fine from Binance spread and caused a stir, advisor Bayo Onanuga spoke up to correct that this figure is just an estimate and has not been confirmed.
Binance's representative also spoke up and said that he is working with the Nigerian government to resolve the case, but has not received any information about paying a fine.
Original article:
According to BBC News citing sources from Premium Times, the Nigerian Government has demanded a minimum compensation of $10 billion from leading cryptocurrency exchange Binance.
Bayo Onanuga - Special Advisor on Information and Strategy to Nigerian President Bola Tinubu - accused the crypto exchange of profiting from the country's "illegal cryptocurrency trading" activities, thereby indirectly affecting the devaluation of the country's local currency Naira.
This person stated:
"Binance has attracted people to speculate in cryptocurrencies with their national currency, affecting the exchange rate, causing the Naira to drop nearly 70% in recent months.
Not only that, this exchange also sets the country's exchange rate and that is an illegal rate. Only the Central Bank of Nigeria (CBN) is authorized to set this exchange rate."
Nigeria was one of the leading countries in cryptocurrency adoption in Africa, even implementing the CBDC initiative early. However, changes in the economic situation in this country caused people to abandon the local currency Naira to switch to crypto to avoid risks.
The above incident has caused Nigeria to face a crisis in its national currency, the Naira has dropped to a record low against the US Dollar (USD), and is said to be doing everything possible to Limiting the flow of money abroad, including increasing taxes on foreign workers, as well as closer monitoring of cryptocurrency trading activities.
During a press conference on February 27, Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, announced that in 2023, up to 26 billion USD in untraceable assets flowed through Binance's branch floor in the country. This. Furthermore, in an interview with BBC, Mr. Onanuga also asked Binance to take responsibility for the exchange's influence on the Nigerian economy.
The above information confused the cryptocurrency community, however, Director of Strategic Communications at the Office of the National Security Advisor (ONSA), Zakari Mijinyawa, confirmed the above information, and said this is part of the information. in an effort to maintain the stability of the local currency Naira amid the rise of cryptocurrency exchanges, significantly impacting Nigeria's financial ecosystem.
This is also the latest development between the Nigerian Government and the Binance exchange, launched in June 2023 by the Nigerian Securities Commission (SEC). By July 2023, the Nigerian SEC continued to warn people in the country about the risks of investing in cryptocurrency through the Binance platform, because this is an exchange that is neither licensed nor regulated by the commission. .
Nigeria's announcement of a demand for $10 billion in compensation could cause the incident to be "pushed to a climax" after detaining two Binance managers working in this country just 1 day ago.
Currently, the Nigerian government has not yet issued an official statement on the nature of the investigation, as well as the accusations placed on Binance.
Previously, according to experts, the country's 2023 budget is running a deficit of 11 trillion naira, and debt repayment costs are 6 trillion naira, so the country is looking for new ways to raise funds for your budget.
Nigeria has imposed a 10% tax on profits from digital assets in the latest amendment of the National Finance Act 2022. The tax will include profits earned from trading, staking or investments other cryptocurrencies. Under the Capital Gains Tax Act, the term digital assets has been included in the asset classes for tax purposes.
The Act reads: “Subject to any exceptions to the Act, all forms of property shall be property for the purposes of this Act, whether located in Nigeria or not, including options , debt, digital assets and consolidated assets in general.”
The announcement of the new policy has been met with a lot of backlash from the Financial markets, with many wondering how the government plans to tax a sector it describes as “illegal”. Over the weekend, the Securities and Exchange Commission (SEC) in Nigeria announced that the operations of Binance Nigeria Limited, Binance's local branch in the country, were illegal and non-compliant.
The committee also urged investors to be wary of the company and warned the exchange to stop calling for investments from the country.
In a June 9 statement, the Securities and Exchange Commission (SEC) said: “Binance Nigeria Limited is directed to immediately cease solicitation of any kind to Nigerian investors.” They said the company was not registered or regulated, making it “illegal”.
A New Hope Amidst Chaos
Regardless of the external circumstances, experts have confirmed there is a shift in the country's dealings with digital assets. The Central Bank of Nigeria banned cryptocurrency trading in 2021 with harsh words against the sector while easing its “failure” e-naira, creating panic among users.
That period ended when the new President, Bola Ahmed Tinubu, in his manifesto, recognized digital assets and created a path for them in the national economy. Experts say that digital assets have been given legitimacy with this new tax code because the government cannot tax what is illegal.
According to many, the ban on Binance, although harsh, is in line with the 10% tax policy that forces all exchanges to register with authorities to become a regulated market. Nigeria has a pro-cryptocurrency population but with revenues falling, the government must look for other sources of revenue.
In 2022, Nigeria ranked 11th according to Chainalysis's Global Cryptocurrency Adoption Index amid difficult regulatory policies.
