According to recent reports, Nigeria is currently detaining two executives from the cryptocurrency company Binance as the country deals with a currency crisis. The detention of these executives comes as the Nigerian government blames Binance for causing a decline in their currency’s value. To address the issue, Binance’s Head of Financial Crime Compliance, Tigran Gambaryan, and regional manager for Africa, Nadeem Anjarwalla, traveled to Nigeria last month. However, both men are currently under house arrest and have not been charged with any crime.
This news follows a previous report that two unnamed Binance executives were picked up by national security officers upon arriving in Nigeria. The government claims that Binance is operating illegally in the country and causing a loss of tax revenue. While the National Security Adviser’s spokesperson has stated that the situation is being handled through meetings and discussions, the executives’ families have reported that they are still under house arrest.
During a press conference last month, Nigerian Central Bank Governor Olayemi Cardoso mentioned Binance while announcing an increased interest rate to stabilize the country’s currency. He criticized “illicit flows,” claiming that $26 billion had been processed through Binance in Nigeria from unidentified sources and users.
Other government officials, such as Bayo Onanuga, an adviser to Nigerian President Bola Tinubu, have also voiced concerns about crypto companies setting exchange rates for the country and undermining the central bank’s role. As a result, Nigeria has ordered its telecom companies to block platforms like Binance and Coinbase, a significant shift in the government’s stance. Just last year, the country’s central bank lifted a three-year ban on crypto transactions but called for regulation of virtual asset service providers.
Despite the government’s actions, Nigerians have increasingly turned to crypto in recent years to protect their savings from the country’s high inflation rates. Data from Chainalysis shows that Nigeria has the second-highest rate of crypto adoption globally, behind only India. In the 12 months leading up to June 2023, residents carried out approximately $60 billion worth of crypto transactions.
It is unclear how this situation will progress and what impact it will have on the use and regulation of cryptocurrency in Nigeria. However, it highlights the growing tension between governments and crypto companies as the digital currency market continues to expand.
