Market News

Crypto exchange Binance has disclosed substantial cooperation with Nigerian authorities in a blog post on March 13 in response to recent turmoil involving its operations in the country.

According to Binance, the now-turbulent relationship with authorities was quite different a few months ago. In August 2023, for instance, the exchange held two full-day sessions with Economic and Financial Crimes Commission (EFCC) officials in Abuja and Lagos, each attended by more than 30 investigators.

The training focused on instructing investigators to trace money on the blockchain using both public and commercial tools. “We also introduced several case studies, including those featuring Nigerian suspects. Both sessions received overwhelmingly positive feedback from Nigerian investigators, who expressed strong interest in continuing this format of cooperation,” Binance said.

Binance is also said to have responded to 626 information requests from Nigerian law enforcement agencies in an average of 37.4 hours between June 2020 and February 2024, supporting investigations from the Nigeria Police Force, EFCC, and INTERPOL Nigeria.

Binance’s blog post is a response to allegations made by the local government that the company has manipulated the national currency, the Nigerian naira (NGN), and contributed to the country’s economic difficulties, calling for a ban on all crypto exchanges operating in Nigeria.

The Central Bank of Nigeria (CBN) has also expressed concerns about suspicious financial flows through the exchange, estimating that $26 billion passed through Binance Nigeria from unknown users and sources in 2023.

The scrutiny led to a fundamental change in Binance’s relationship with the local government, which resulted in two of its senior executives being detained on Feb. 26. Binance has also delisted all Nigerian Naira trading pairs from its peer-to-peer service amid this crackdown.

Nigeria is considered one of the fastest-growing crypto economies in the world, ranking second in global crypto adoption as of 2023. However, the naira experienced significant turbulence last year, largely due to economic unrest and low confidence among investors.

According to Reuters, the naira fell 36% on the official market in June 2023 after President Bola Tinubu removed trading restrictions and suspended Nigeria’s central bank governor, Godwin Emefiele.