Binance ordered to pay $10 billion in Nigeria

The Nigerian government has reportedly demanded a minimum of $10 billion from Binance amid a crackdown on the crypto exchange and the devaluation of the country’s local currency, the naira.

Bayo Onanuga, special adviser on information and strategy to President Bola Tinubu, revealed this demand in an interview with the BBC, alleging that Binance profited from “illegal transactions” at the country’s expense.

Binance is currently under investigation in Nigeria, with the Office of the National Security Adviser coordinating an interagency investigation into its operations. The investigation, which involves the Central Bank of Nigeria (CBN) and other law enforcement and security agencies, is looking into the exchange’s activities in the foreign exchange market.

In response to the government’s actions, Binance has removed the Nigerian naira from its peer-to-peer (P2P) service, which allows users to trade cryptocurrencies without involving a third party. The P2P feature became popular in Nigeria in 2021 following the government’s ban on its crypto industry.

The Nigerian government’s crackdown on crypto exchanges comes amid concerns about the rapid decline of the naira and the country’s almost three-decade-high inflation rate. However, some local crypto analysts have criticized the government’s approach, arguing that antagonizing cryptocurrencies will not resolve the nation’s financial challenges.

Binance has also faced criticism for setting a limit on the selling price of Tether (USDT) tokens on its P2P platform, leaving traders unable to sell USDT above a certain price. The exchange explained that this was due to an automatic system pause, contrary to speculation by the local crypto community.

The Nigerian government banned cryptocurrency operations during former President Muhammadu Buhari’s administration. The move aimed at stemming the rapid decline of the Naira and addressing the country’s soaring inflation rate, which has reached a near three-decade high of 29.9%.

Back in 2022, angry consumers of the troubled crypto exchange AAX stormed its local office in Nigeria hoping they can get their money back after the firm when it halted operations.