Binance Admin has been ordered by a Nigerian High Court to provide the Economic and Financial Crimes Commission (EFCC) with all pertinent data and information concerning any individual from Nigeria accessing its trading platform.
As per the findings of Sahara Reporters, a local news outlet, the EFCC filed an ex parte motion against the cryptocurrency exchange platform Binance on February 29. Justice Emeka Nwite issued an interim ruling on February 29 that accommodated the directive.
An ex-parte motion occurs when only one party is in attendance, and the defense is not provided with advance notice of the motion, which precludes them from offering an argument.
In the motion, Ekele Iheanacho, the attorney for the anti-corruption organization, argued that Binance’s operations in Nigeria involve illicit elements.
This claim violates Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and Section 38 of the EFCC Act, 2004, both requiring reporting suspicious transactions to authorities and imposing penalties for failure to do so.
Hamma Bello, an operative of the EFCC, stated in an affidavit that intelligence received regarding the Binance cryptocurrency exchange platform implicates alleged money laundering and terrorism financing, which compels the Commission to conclude its ongoing investigation.
According to Bello, upon receiving the intelligence, the EFCC team identified users engaging in illicit activities on the cryptocurrency platform, including price discovery, confirmation, and market manipulation. These activities caused substantial distortions in the foreign exchange market and contributed to the depreciation of the naira against other currencies.
According to the Commission, Binance administrators were duly informed of these activities’ detrimental impacts on the Nigerian economy. As a result, the Commission requested the removal of the naira from Binance’s trading platform.
Nathaniel Luz, CEO of Flincap, a liquidity platform for cryptocurrency exchanges, stated in an interview with Cointelegraph that while this court order is advantageous for the Nigerian government, a roundtable discussion between Binance and the Nigerian government would be the best course of action on this matter.
Bayo Onanuga, adviser to the president on information and strategy, argued that Binance and other cryptocurrency platforms caused a steep depreciation of the local fiat currency, the naira, through manipulation. The official further proposed the prohibition of platforms such as Binance within the nation.
In recent years, Nigeria has emerged as one of the world’s crypto economies with the most rapid growth. In 2023, it also ranked as the second-largest economy globally regarding cryptocurrency adoption.