Nigeria vs Binance: the $10 billion damages claim

The government of Nigeria has reportedly filed a compensation claim against Binance, estimated at least 10 billion dollars, alleging that the platform has benefited from “illegal transactions” to the detriment of the country.

Let’s see below all the details. 

Nigeria: Binance has profited from “illegal transactions” at the expense of the country

As anticipated, the Nigerian government would have requested Binance a compensation of at least 10 billion dollars. This follows the actions taken in the cryptocurrency sector and the depreciation of the local currency.

The news was disclosed by Bayo Onanuga, special adviser for information and strategy to President Bola Tinubu, in an interview with the BBC.

Onanuga claims that Binance has benefited from “illegal transactions” to the detriment of the country. Binance is already under investigation in Nigeria, as reported by several sources. 

Zakari Mijinyawa, head of strategic communication at the office of the national security adviser, confirmed: 

“The office of the National Security Advisor is coordinating an inter-agency investigation into Binance’s operations in the ongoing foreign exchange market operations with the CBN and other law enforcement and security agencies.”

Binance executives were reportedly arrested in Nigeria earlier this week. Additionally, the platform has removed the Nigerian currency, the naira, from its peer-to-peer service.

Binance removes Naira from P2P platform

As mentioned above, Binance recently excluded the Nigerian currency, the Naira, from its peer-to-peer (P2P) service. This has generated mixed reactions and concerns about economic stability.

Bayo Onanuga, special adviser to President Bola Tinubu, has revealed that the action is part of the government’s efforts to stabilize the local currency. 

Onanuga has accused Binance of arbitrarily fixing exchange rates, threatening to destroy the Nigerian economy if not stopped.

The P2P function, which allows users to make exchanges without involving third parties, was popular in Nigeria in 2021 after the government ban on the thriving cryptocurrency industry. 

Due to the rapid decline of the Naira and an inflation rate that has reached 29.9%, the government has intensified its focus on platforms that provide cryptocurrency services. 

Noticing in particular their role in determining an informal value for the Naira.

Binance has been under scrutiny in Nigeria following concerns expressed by the Central Bank of Nigeria (CBN) regarding “suspicious flows” of funds through Binance Nigeria in 2023.

Olayemi Cardoso, head of the CBN, emphasized that 26 billion dollars passed through Binance in Nigeria in 2023 from unidentified sources and users.

Local cryptocurrency analysts have criticized the government’s hostile attitude towards cryptocurrencies. Specifically, arguing that solving the exchange problem requires a more balanced approach that encourages production and exports.

A passionate Nigerian cryptocurrency enthusiast stated on X that the country’s financial problems will persist if the government continues to hinder cryptocurrencies instead of focusing on broader solutions.