Nigeria Demands $10 Billion from Binance Amid Crypto Crackdown

Nigeria accuses Binance of illegal trading, demands $10 billion compensation

On March 1, 2024, according to a BBC report, the Nigerian government demanded Binance pay at least $10 billion in compensation. This demand comes amidst Nigeria's crackdown on cryptocurrency exchanges and the depreciation of its national currency. Nigeria accuses Binance of profiting from "illegal transactions" within the country. Currently, Binance is under investigation in Nigeria, and earlier this week, Nigerian authorities detained executives of Binance.

On the same day, the cryptocurrency trading platform Binance removed the Nigerian Naira from its peer-to-peer (P2P) feature. Binance users in Nigeria have voiced their concerns and complaints on the social platform X about this development.

As Binance delisted the Naira from its P2P market, Nigerian authorities claim that the platform has contributed to the depreciation of the Naira. Bayo Onanuga, an advisor to the Nigerian president, stated that Binance would destroy the Nigerian economy if it did not cease its operations, citing arbitrary fixed foreign exchange rates. Due to the rapid fall of the Naira and the resulting 29.9% inflation rate, the highest in nearly 30 years, the government has shifted its focus to platforms providing cryptocurrency services, as these websites have facilitated transactions and established an informal value for the Naira.

Nigerian crypto users reported earlier difficulties in accessing cryptocurrency exchange websites, including Binance and OctaFX. A few days later, Binance set a limit on the sale price of USDT on its P2P platform, preventing traders from selling USDT at a price above 1,802 Naira per USDT.

Two Binance executives detained in Nigeria

According to the Financial Times, two executives of Binance were detained in Nigeria. Insiders revealed that after Nigeria decided to ban several cryptocurrency trading websites last week, these executives flew to Nigeria but were detained by the office of the National Security Adviser, and their passports were confiscated.

Binance is one of the world's largest cryptocurrency exchanges, but it faces unprecedented challenges in Nigeria, Africa's largest economy and one of the highest users of cryptocurrency globally. However, the country's currency, the Naira, has been falling in recent years, leading to soaring inflation and a shortage of foreign exchange.

For Nigerian authorities, cryptocurrency exchanges are one of the main causes of the Naira's depreciation, as they provide a channel to bypass official exchange rates, posing a threat to the nation's financial stability and security.