Why Nigeria Imposed $10bn Fine on Binance

The Nigerian government has imposed a fine of at least $10 billion on Binance as part of its efforts to stabilize the nation’s local currency amid a crackdown on the crypto exchange platform. Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, stated in an interview with the BBC that Binance had engaged in “illegal transactions” in Nigeria, leading to substantial profits for the platform while the nation suffered significant losses.

Mr. Onanuga claimed that Binance, which is not registered in Nigeria and has no physical presence in the country, allowed users to manipulate dollar-naira exchange rates, negatively impacting the local currency’s value. He also mentioned that Binance has suspended naira-related transactions on its platform and is cooperating with the Nigerian government by providing information.

The government is demanding at least $10 billion in retribution from Binance, according to Mr. Onanuga. This move follows earlier allegations by Mr. Onanuga that if left unchecked, Binance could destroy the Nigerian economy by manipulating foreign exchange rates.

In response to reports of currency manipulation and illicit fund movement, the Nigerian government had previously blocked Binance and other crypto firms’ online platforms. The government believes that these activities contribute significantly to the weakening of the naira.

Binance, a digital assets platform, has been urged to comply with local regulations. In September 2023, Nigeria’s Securities and Exchange Commission (SEC) declared Binance Nigeria Limited illegal, stating that it was neither registered nor regulated by the Commission.

Binance, in its response, stated that it is working with local authorities, lawmakers, and regulators to ensure compliance. However, the platform has declined further comments amid the ongoing clampdown.

The Nigerian government’s demand for retribution comes after Binance pleaded guilty and agreed to pay $4.3 billion to settle criminal money laundering charges by the U.S. Department of Justice. Binance’s founder and CEO, Changpeng Zhao, also known as CZ, pleaded guilty and agreed to step down from his position. His criminal trial has been postponed to 30 April by a US court.

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