A Nigerian High Court has issued a ruling ordering Binance Holdings, the cryptocurrency exchange platform, to provide the Economic and Financial Crimes Commission (EFCC) with comprehensive data and information regarding Nigerian traders on its platform.
According to Sahara Reporters, the court’s directive was made on February 29 in response to an ex parte motion filed by the EFCC against Binance. In an ex parte motion, only one party is present and the defense is not given prior notice, preventing them from presenting arguments.
The motion filed by the EFCC’s lawyer, Ekele Iheanacho, argued that Binance’s activities in Nigeria involve criminal elements. This assertion goes against Sections 38 of the EFCC Act, 2004, and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022, which require the reporting of suspicious transactions to authorities, with penalties for non-compliance.
In an affidavit, EFCC operative Hamma Bello stated the need for the Commission to complete its ongoing investigation after receiving intelligence on alleged money laundering and terrorism financing involving the Binance platform. Bello revealed that the EFCC team discovered users engaging in illegal activities such as price manipulation, confirmation, and market distortion on the cryptocurrency platform, which has had significant effects on the foreign exchange market and further devalued the Nigerian naira.
As a result of these activities, the EFCC requested the delisting of the naira from Binance’s trading platform due to the adverse effects on the Nigerian economy. However, Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, suggested that a roundtable conversation between Binance and the Nigerian government would be the best course of action.
Bayo Onanuga, presidential adviser on information and strategy, argued that Binance and other crypto platforms have manipulated the naira and caused a significant decline in the local fiat currency. Onanuga also suggested the possibility of banning platforms like Binance in the country.
Nigeria has seen rapid growth in its crypto economy and is currently the second-largest economy in terms of crypto adoption in the world.