The Nigerian government has imposed a staggering $10 billion fine on Binance, one of the world’s largest cryptocurrency exchanges. This comes amidst a broader crackdown on the global crypto exchange.

The authorities cite concerns over illegal transactions that allegedly contributed to the devaluation of the nation’s local currency, the naira.

The Nigerian government’s decision to fine Binance is part of a concerted effort to salvage the value of the naira, which has witnessed a dramatic decline, losing over 40% of its value against the dollar on the official market in 2023 alone.

The Central Bank of Nigeria (CBN) has taken regulatory actions against crypto exchanges in the country, with Binance Nigeria Limited initially being outlawed in September 2023.

The regulatory measures stem from fears over financial stability and the potential for misuse of cryptocurrencies. The government alleges that illegal activities conducted through platforms like Binance have exacerbated the depreciation of the naira.

The Office of the National Security Adviser (ONSA) is spearheading an interagency investigation into Binance’s operations, involving various regulatory bodies, security services, anti-corruption, and intelligence agencies.

A senior official from the ONSA noted that the office of the security adviser is overseeing an interagency probe into Binance’s activities.

This was the initial official acknowledgment of the measures taken to curtail the operations of Binance and other cryptocurrency platforms.

“I am confirming that the office of the national security adviser, as part of ongoing operations in the foreign exchange market with the CBN and other law enforcement and security agencies, is coordinating an interagency investigation into the operations of Binance,” Zakari Mijinyawa, head of Strategic Communication at the Office of the National Security Adviser said.

The investigation was first prompted by concerns raised by the Central Bank of Nigeria (CBN) regarding suspicious flows of funds through Binance Nigeria.

It was reported that $26 billion had passed through Nigeria via Binance from unidentified sources and users. This raised red flags about potential money laundering and illicit activities.

Genesis and Hive Hydrogen’s Green Ammonia Project Sparks Economic and Environmental Transformation In Eastern Cape

The intensified crackdown on cryptocurrency exchanges, including Binance, highlights the government’s determination to address the root causes of the naira’s devaluation.

This crackdown comes amid record-high inflation rates of nearly 30%, further exacerbating the economic challenges facing Nigeria.

The implications of Nigeria’s actions against Binance extend beyond its borders, with significant global ramifications.

Nigeria stands to lose an important source of tax revenue as Binance is not registered in the country. This deprives the government of potential tax revenue from cryptocurrency transactions.

The devaluation of the naira, coupled with the crackdown on cryptocurrency exchanges, contributes to a cost-of-living crisis for Nigerians, further eroding purchasing power and exacerbating economic hardships.

Cryptocurrency websites have emerged as alternative platforms for trading, establishing unofficial exchange rates for the naira, undermining the government’s efforts to stabilize the local currency.

Binance Nigeria was officially registered in December 2019. However, in September 2023, the Securities and Exchange Commission (SEC) of Nigeria declared that Binance Nigeria Limited was “neither registered nor regulated by the Commission.” Consequently, the SEC stated that Binance’s operations in Nigeria were deemed illegal.