LUCKNOW (CoinChapter.com) — The clash between cryptocurrency giant Binance and Nigeria has escalated, with the country’s federal court ordering the exchange to hand over comprehensive data of all its Nigerian users to the country’s Economic and Financial Crimes Commission (EFCC).
This dramatic months-long conflict began when Nigeria accused Binance of facilitating the illegal transfer of $26 billion out of the country. In retaliation, Nigeria slapped Binance with a staggering $10 billion fine.
The directive emerged from an interim ruling delivered on Feb. 29 by Justice Emeka Nwite, following an ex parte motion filed against Binance by the EFCC. An ex parte motion is a legal procedure in which only one party is present, denying the defense prior notice or the ability to argue their case.
In the motion, EFCC lawyer Ekele Iheanacho alleged that Binance’s activities in Nigeria contained elements of criminality. This assertion claims the crypto exchange violated Section 38 of the EFCC Act of 2004 and Section 15 of the Money Laundering (Prevention and Prohibition) Act of 2022, which mandate reporting suspicious transactions to authorities and carry penalties for non-compliance.
How Did Binance’s Alleged Activities Affect Nigeria’s Economy?
In an affidavit, EFCC operative Hamma Bello outlined the need for the Commission to complete its ongoing investigation into alleged money laundering and terrorism financing involving Binance’s cryptocurrency exchange platform. This affidavit cited intelligence received by the EFCC.
According to Bello, the EFCC’s probe discovered users leveraging Binance for illicit activities like exchange rate manipulation, order book inflation, and market manipulation. These actions allegedly caused significant distortions in Nigeria’s foreign exchange markets. Subsequently, this also contributed to the naira’s devaluation against other currencies.
The affidavit stated that after communicating these concerns to Binance operators, the Commission requested that the naira be delisted from Binance’s trading platform to mitigate the adverse economic impacts of these purported activities in Nigeria.
Broader Crypto Scrutiny
However, for Nigeria, Binance is not the only one to blame. The entire crypto industry is under scrutiny. Last month, the country banned several cryptocurrency trading websites. Additionally, Nigeria has proposed a 400% hike in registration fees for crypto companies, potentially driving many out of the market.
Related post: Coinbase CEO Denies Nigerian Ban, Exchange Still Accessible
Tensions between these two also heightened further because Nigerian authorities detained two senior Binance executives who had traveled to the country for negotiations. Their detention has now lasted several weeks, and a court hearing involving the executives is scheduled for Wednesday.
The sweeping court order for Binance’s Nigerian user data follows narrower demands for records on the platform’s top 100 clients and six months of transactions. If Binance complies, it could set a concerning precedent regarding user privacy for the global crypto industry.
