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FG fines Binance $10 billion for alleged role in FX crisis

The $10 billion fine is the largest ever imposed on a cryptocurrency exchange by a regulatory body.
Ledger Bloc
Bitcoin and Law

The Nigerian government has imposed a $10 billion fine on cryptocurrency exchange platform Binance, accusing it of contributing to the nation's ongoing foreign exchange (FX) crisis.

This information was disclosed today, Friday, March 1st 2024, on BBC's interview with the special adviser to President on information and strategy, Bayo Onanuga.

Bayo stated that Binance's activities, particularly facilitating peer-to-peer (P2P) trading of the Nigerian Naira for cryptocurrency, had negatively impacted the country's official forex market. He claimed this has contributed to the depreciation of the Naira and hindered efforts to stabilize the exchange rate.

He also claimed that the crypto exchange profited substantially from its "illegal transactions" in Nigeria while the nation suffered huge losses.

In addition, Bayo made it cleared that Binance is not registered in Nigeria and people are using it to carryout dollar-to-naira arbitrage transaction; a practice he said negatively impacted the value of the nation's currency - Naira.

According to him, Binance officials are already in talk with Nigerian Government to settle the issues on ground. Recall that FG is still detaining two Binance top executives over alleged FX manipulations.

In addition to the ongoing investigation into FX crisis, Binance has suspended any naira-related transactions on the platform.

Furthermore, Bayo cited many top nations that had banned Binance due to it illegal activities. He highlighted the United Kingdom, the United States, Singapore and Canada.

Binance which is blatantly setting exchange rates for Nigeria, hijacking CBN role, is a cryptocurrency trading platform and suffers access limitations from multiple jurisdictions, such as the US, Singapore, Canada and the UK, he said.

However, Binance is currently being investigated by the NIGERIA government till further notice. This information was confirmed by the Office of the National Security Adviser (ONSA) early today (Friday, March 1st 2024).

The Nigerian government has been grappling with a significant FX shortage for several years. This has led to restrictions on access to foreign currency, impacting businesses and individuals who rely on it for imports and international transactions.

The CBN has implemented various measures to address the FX crisis, including a ban on cryptocurrency transactions by financial institutions in 2021. However, P2P trading platforms like Binance have emerged as alternative channels for Nigerians to access foreign currency.

The $10 billion fine is the largest ever imposed on a cryptocurrency exchange by a regulatory body. It is unclear how the Nigerian government plans to enforce the fine, as Binance is not officially registered in the country. Who knows, maybe they will enforce it through continuation of detaining the Crypto platform top executives.

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