Binance, Others Face Billions of Dollars in Fines Over Alleged Currency Manipulations as Naira Rises
- Binance and other cryptocurrency platforms operating in Nigeria may face huge fines running into billions of naira
- The development follows a plethora of investigations launched by the CBN and the Nigerian government to crackdown currency manipulators
- It is reported that two Binance officials who flew into Nigeria were allegedly arrested by the office of the NSA
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Legit.ng’s Pascal Oparada has reported Tech, Energy, Stocks, Investment and the Economy for over a decade.
The Securities and Exchange Commission (SEC) may slam substantial fines running into billions of dollars on Binance, the world’s largest cryptocurrency exchange and others operating in Nigeria.
SEC and other security operatives are investigating allegations of currency manipulations against the Nigerian currency by Binance and other crypto platforms.
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Binance turns off the naira feature
The development allegedly contributed to the current foreign exchange crisis in Nigeria.
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Binance had faced sanctions by the US government for repeatedly engaging in currency fraud and manipulations.
ThisDay reports that following the crackdown by the Nigerian government, Binance suspended its operations and barred users from buying USDT and USDC stablecoins using the naira as the Central Bank of Nigeria commenced fresh investigations in collaboration with security agencies.
However, the naira appreciated in the parallel and official markets on Wednesday, February 28, 2024, following a recent increase in the MPR rate, clamp down on currency speculators, and FX allocations to BDCs.
On Wednesday, February 28, 2024, the naira gained N120 in the black market, trading at N1,500 per dollar from the N1,620 it exchanged on Tuesday, February 27, 2024.
The naira gained N6.43 to the dollar in the official market, trading at N1,609.51 per dollar from N1,615.94 per dollar sold the previous day.
The foreign exchange market recorded a turnover of about $119.14 million, showing a 22.7% drop from the $154.16 million quoted on Tuesday, February 27, 2024.
The naira hit an intraday high of N1,660 and a low of N1,401 to a dollar.
Two Binance officials allegedly detained by FG
Financial Times report alleges that Nigerian security officials detained two Binance executives, including an American and a Britsh-Pakistani, who flew down to the country for a meeting with the Office of the National Security Adviser (NSA).
The report said the two Binance officials were arrested and detained while their passports were also seized.
According to the report, the Binance officials were asked to provide data on their naira operations dating back seven years.
The government officials also allegedly demanded that they disable the naira feature from the Binance platform. The Binance officials reportedly declined the requests.
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said during the Monetary Policy Committee meeting that Binance Nigeria processed about $26 billion in one year.
The apex bank boss said that the Nigerian currency is undervalued amid forex manipulations by speculators.
On Tuesday, the CBN approved the sale of $20,000 to each of Nigeria's 785 Bureau de Change (BDC) operators to boost Forex liquidity and strengthen the naira.
The move led to the naira appreciating in the parallel market after crashing to a record low of N1,900 to a dollar.
Dollar crashes against the naira on Binance
Legit.ng earlier reported that the US dollar has crashed against the Nigerian currency, the naira, at the crypto peer-to-peer platform, Binance.
Data from the platform showed that the dollar crashed at around 8 am on Wednesday, February 28, 2024, trading as low as N1,415 per dollar from the N1,606 per dollar it sold in the last 24 hours.
Some traders on the platform reportedly quoted above N1,500 per dollar as trading intensified.
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Source: Legit.ng
