In a significant development in Nigeria’s regulatory pursuit of Binance, a Federal High Court in Abuja has issued an order for Binance to disclose user data to the Economic and Financial Crimes Commission (EFCC).
The court’s decision, made in an ex-parte motion, marks a crucial step in the country’s efforts to investigate potential cases of money laundering, foreign exchange rate manipulation, and terrorism financing associated with the cryptocurrency exchange.
Expanding Probe: Nigerian Authorities Extend Data Demand
During a court hearing on March 18, an EFCC operative revealed that the agency’s Special Investigation Team had flagged suspicious activities and urged Binance to halt all naira-related trading activities. Initially, Nigerian authorities sought six months of transaction records for the top 100 local users.
However, the scope of the demand expanded to encompass all Nigerian customers on the platform, with the specific trading activities under investigation remaining undisclosed.
Binance’s Confrontation with Nigerian Authorities
The court’s order follows the arrest of two Binance executives by Nigerian authorities nearly three weeks prior. Tigran Gambaryan and Nadeem Anjarwalla were detained in Abuja on February 26 after regulatory bodies invited them for discussions. Nigeria’s central bank governor, Olayemi Cardoso, alleged that over $26 billion of untraceable wealth had flowed through Binance, contributing to the rapid depreciation of the naira.
Also Read: Binance Executives Detained in Nigeria Amid Allegations of Crypto Impact on Currency Crisis
Despite lacking concrete data to support these claims, the government threatened Binance with a hefty $10 billion fine for enabling foreign exchange manipulation through the widespread conversion of naira to Tether’s stablecoin USDT.
Binance has emphasized its cooperation with Nigerian law enforcement agencies since June 2020. The exchange also urged local authorities to engage with crypto stakeholders known for constructive collaboration.
This legal entanglement in Nigeria comes in the wake of Binance’s settlement of regulatory issues in the United States, where it agreed to pay $4.3 billion in penalties to the Department of Justice. Additionally, Binance’s founder, Changpeng Zhao, stepped down as CEO and was instructed to surrender his Canadian passport as legal proceedings progressed.