The federal government reportedly detained two top executives of the popular cryptocurrency trading platform, Binance, on Wednesday over alleged manipulations in foreign exchange trading and speculative activities.
the executives visited Nigeria in response to the country’s recent crackdown on various cryptocurrency trading platforms.
During their stay, they were apprehended by the Office of the National Security Adviser, and their passports were confiscated.
Recently, following the naira’s significant devaluation, which led to inflation soaring to an almost 30-year high of 29.9%, the Nigerian government has intensified its regulation of cryptocurrency platforms.
In response to the detention of its executives, Binance discontinued the trading of the naira against bitcoin and tether cryptocurrencies on its exchange.
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What we know
Reports reaching Nairametrics suggest that the two Binance executives detained were American and British, following the breakdown of talks between Nigerian government officials and Binance.
- The officials arrived on Sunday to discuss with Nigerian authorities their suspicions of illicit activities occurring on the cryptocurrency platform.
- A source with knowledge of the matter informed Nairametrics that discussions with Binance began last year as the Central Bank of Nigeria (CBN) investigated suspicions of exchange rate manipulations.
- CBN officials had received complaints from cryptocurrency experts about some traders’ illicit activities.
- They accused some crypto traders of placing false quotes without backing them up with actual supply.
- For instance, a rogue trader could quote a rate out of thin air to sell any amount of stablecoin in exchange for the naira, fully aware that they did not have the supply.
- The incentive for such actions was also high, especially since most genuine forex traders (particularly corporates) viewed Binance as a reliable source for exchange rate quotes.
- CBN officials caught wind of these suspicious trades and had been engaging with Binance to provide details supporting them.
- Another source informed Nairametrics that security officials wanted details of the transactions to aid their investigations.
- However, things turned sour after the Binance officials failed to provide the requested information to the apex bank, subsequently requesting to be taken to their respective embassies.
- Frustrated, the government reportedly obtained a court order to detain the officials.
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