This is cryptocurrency-related news that will have an immediate effect on how Nigerians will be trading their crypto coins or assets.
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Binance CEO Summoned by Nigerian House Committee
The Nigerian House of Representatives Committee on Financial Crimes has summoned Binance CEO Richard Teng over alleged “suspicious flows” on the world’s largest cryptocurrency exchange by trading volume.
Committee chair Ginger Onwusibe issued a seven-day ultimatum to Binance’s management during a panel meeting.
Teng has been ordered to appear before the committee on or before Monday, March 4.
Binance Nigeria has been accused of facilitating untraceable funds amounting to $26 billion in 2023.
Onwusibe warned that if Binance fails to heed the summons, the committee could invoke its constitutional authority and take appropriate measures against the crypto firm.
Central Bank of Nigeria’s Concerns
The Central Bank of Nigeria (CBN) raised concerns about “illicit flows” going through Binance Nigeria.
In a press briefing, CBN’s governor, Olayemi Cardoso, stated that in 2023, “$26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
The Nigerian government has taken steps to curb the downturn of the Naira, including blocking Binance and other crypto trading platforms.
Binance’s Response
Binance’s legal counsel, Mr. Senator Ihenyen, informed the Nigerian House of Representatives that Binance CEO Richard Teng cannot come to Nigeria due to travel restrictions imposed by the COVID-19 pandemic and other factors.
He also denied the allegations of facilitating illicit flows, saying that Binance complies with all the relevant regulations and anti-money laundering policies in Nigeria and globally.
He added that Binance is willing to cooperate with the authorities and provide any information they may require to resolve the matter amicably.
What Does This Mean for Crypto Users in Nigeria?
The summoning of the Binance CEO by the Nigerian House of Representatives is a sign of the growing scrutiny and regulation of the crypto industry in Nigeria, which is one of the largest markets for digital assets in Africa.
The Nigerian government has expressed its concern over the impact of crypto on the stability of the Naira, which has depreciated significantly in recent years due to inflation, oil price shocks, and foreign exchange shortages.
The CBN has also warned that crypto transactions pose a risk of money laundering, terrorism financing, and tax evasion, and has urged banks and other financial institutions to stop dealing with crypto entities or face sanctions.
However, many Nigerians have embraced crypto as a way to hedge against currency devaluation, access global markets, and participate in the digital economy.
According to a report by Chainalysis, Nigeria ranked third in terms of crypto adoption in 2021, behind Vietnam and India.
The report also estimated that Nigerians traded over $400 million worth of crypto on peer-to-peer platforms such as Paxful and LocalBitcoins in 2021 alone.
The summoning of the Binance CEO could have a chilling effect on the crypto ecosystem in Nigeria, as it could deter other exchanges from operating in the country or serving Nigerian customers.
It could also create uncertainty and fear among crypto users, who may face legal consequences or lose access to their funds if Binance or other platforms are shut down or blocked by the government.
However, some crypto experts and enthusiasts have expressed their optimism that the situation will be resolved peacefully and constructively and that Nigeria will eventually adopt a more favorable and progressive stance towards crypto innovation and adoption.
That’s it for this post. Catch up to the next.
