Nigeria’s Securities and Exchange Commission (SEC) is reportedly preparing to impose significant fines, potentially totaling billions of dollars, on cryptocurrency exchange giant Binance and other crypto firms operating in the country. The move comes amid ongoing investigations into allegations of currency manipulation activities against the Naira, exacerbating the nation’s foreign exchange liquidity crisis.
According to sources, the SEC, in collaboration with other security agencies, is probing claims that crypto companies engaged in currency manipulation without underlying transactions, contributing to the Naira’s weakening against major currencies.
Binance, previously sanctioned by the US Government for currency manipulation, has suspended its operations and halted the purchase of stablecoins USDT and USDC with Naira following fresh investigations by the Central Bank of Nigeria (CBN) and security agencies.
Reports suggest that two Binance executives, including an American and a British-Pakistani, were detained after a meeting with officials from the Office of the National Security Adviser (NSA). The executives were allegedly asked to provide data on their Naira operations spanning seven years, a request they reportedly declined.
Furthermore, it’s rumored that the federal government may have obtained a court warrant to detain the Binance officials for at least 12 days for further investigation into their suspected activities and uncovering potential collaborators.
Speaking at the recent Monetary Policy Committee (MPC) meeting, CBN Governor, Mr. Olayemi Cardoso, defended the bank’s actions, citing concerns over speculative activities against the Naira facilitated by platforms like Binance. He emphasized the need to protect Nigerians from illicit flows and suspicious transactions, pledging collaboration with relevant agencies to crack down on economic saboteurs.
While the crackdown aims to safeguard the economy, analysts warn of potential repercussions on investor confidence. They caution that the operation could send mixed signals to foreign investors and exacerbate concerns about the investment climate in Nigeria.
Despite the regulatory scrutiny, some cryptocurrency exchanges have voluntarily suspended certain trading activities. However, the broader implications of these actions on the crypto market and investor sentiment remain uncertain.
As the investigation unfolds, stakeholders closely monitor developments in Nigeria’s cryptocurrency landscape, emphasizing the need for regulatory clarity and transparency to ensure market integrity and investor protection.
