The Nigerian government has demanded nearly $10 billion (£8 billion) in compensation from the cryptocurrency exchange platform, Binance, accusing it of manipulating foreign exchange rates and contributing to the ongoing devaluation of the Nigerian naira.
The Nigerian government alleges that Binance engaged in “currency speculation and rate-fixing,” contributing to the naira’s significant devaluation. This claim comes after two Binance executives were detained earlier this week, fueling speculation of a potential crackdown on cryptocurrency operations in the country.
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, recently accused Binance Nigeria of facilitating the movement of $26 billion in untraceable funds, raising concerns about potential money laundering and financing of illegal activities.
Cryptocurrency transactions have become increasingly prominent in Nigeria, with figures exceeding 12% of the country’s GDP. While cryptocurrencies remain legal, operating within the Nigerian market necessitates official registration, a requirement Binance allegedly failed to meet.
President Bola Tinubu’s decision to abandon the fixed exchange rate with the US dollar last year led to market fluctuations. However, the government insists that the recent collapse transcends normal market activity and blames Binance for artificially inflating the exchange rate.
To curb the naira’s decline, the government has taken various measures, including suspending several cryptocurrency platforms like Coinbase and Kraken, as well as shutting down numerous currency exchange offices. The central bank is under immense pressure to stabilize the naira, which has depreciated significantly from 460 naira per US dollar a year ago to its current rate of 1,595.
