A Nigerian High Court has issued a directive to Binance Holdings, instructing them to provide the Economic and Financial Crimes Commission (EFCC) with comprehensive data and information about Nigerian traders on their platform.
According to local news outlet Sahara Reporters, Justice Emeka Nwite delivered the interim ruling on February 29 in response to an ex parte motion filed by the EFCC against Binance. An ex parte motion is a legal proceeding where only one party is present, and the other party is not given prior notice, thereby preventing them from presenting an argument.
In the motion, the lawyer representing the anti-graft agency, Ekele Iheanacho, argued that Binance’s activities in Nigeria involve criminal elements. This assertion goes against Sections 38 of the EFCC Act, 2004, and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended), which require the reporting of suspicious transactions to authorities, with penalties for non-compliance.
In an affidavit, EFCC operative Hamma Bello emphasized the need for the Commission to conclude its ongoing investigation after receiving intelligence about alleged money laundering and terrorism financing facilitated by the Binance crypto exchange platform.
Bello stated that upon receiving the intelligence, the EFCC team discovered users engaging in illegal activities such as price discovery, confirmation, and market manipulation on the cryptocurrency platform. These activities have resulted in significant distortions in the foreign exchange market and further devaluation of the Nigerian naira against other currencies.
The commission highlighted the adverse effects of these activities on the Nigerian economy and requested the delisting of the naira from Binance’s trading platform.
In an interview with Cointelegraph, Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, suggested that while the court order benefits the Nigerian government, the best approach would be for Binance and the government to engage in a roundtable conversation to address the issue.
Bayo Onanuga, the presidential adviser on information and strategy, argued that Binance and other crypto platforms have manipulated the naira, leading to a significant decline in the local fiat currency. He also suggested considering a ban on platforms like Binance in the country.
Nigeria has emerged as one of the world’s fastest-growing crypto economies in recent years and is projected to be the second-largest crypto adoption market in 2023.
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Binance compelled by Nigerian court to reveal comprehensive user data