In a recent blog post, cryptocurrency exchange Binance revealed its extensive collaboration with Nigerian authorities. This announcement comes in response to the recent challenges the company has faced in the country. Binance highlighted that its relationship with authorities was much more positive a few months ago. In August 2023, the exchange organized two full-day training sessions for over 30 investigators from the Economic and Financial Crimes Commission (EFCC) in Abuja and Lagos. These sessions focused on teaching investigators how to trace money on the blockchain using various tools. Binance also presented case studies involving Nigerian suspects, which received positive feedback and expressed a desire to continue this cooperative format. Additionally, Binance responded to 626 information requests from Nigerian law enforcement agencies in an average of 37.4 hours between June 2020 and February 2024, supporting investigations by the Nigeria Police Force, EFCC, and INTERPOL Nigeria.
The blog post is Binance’s response to allegations made by the local government that the company has manipulated the Nigerian naira (NGN) and contributed to the country’s economic difficulties. The Central Bank of Nigeria (CBN) has also expressed concerns about suspicious financial flows through Binance Nigeria, estimating that $26 billion passed through the exchange from unknown users and sources in 2023. As a result of the increased scrutiny, Binance’s relationship with the local government changed significantly, leading to the detention of two senior executives on February 26. In response, Binance removed all Nigerian Naira trading pairs from its peer-to-peer service.
Nigeria is known as one of the fastest-growing crypto economies globally and ranked second in global crypto adoption in 2023. However, the country faced economic unrest and low investor confidence, which significantly affected the value of the naira. According to Reuters, the naira experienced a 36% decline on the official market in June 2023 after President Bola Tinubu lifted trading restrictions and suspended the central bank governor, Godwin Emefiele.