2024-03-21
Nigerian High Court has issued a directive for Binance Holdings to provide the Economic and Financial Crimes Commission (EFCC) with data on Nigerian traders using its platform.
This follows an interim ruling by Justice Emeka Nwite on Feb. 29, prompted by an ex parte motion filed by the EFCC against Binance.
According to local news outlet Sahara Reporters, the directive was given in an interim ruling delivered by Justice Emeka Nwite on Feb. 29 following an ex parte motion filed against the cryptocurrency exchange platform Binance by the EFCC.
An ex parte motion allows one party, in this case, the EFCC, to make a request or argument to the court without notifying or involving the other party, Binance, beforehand.
In such cases, the court may issue rulings based solely on the information provided by the party making the motion, without hearing the opposing party's arguments.
The lawyer representing the anti-graft agency, Ekele Iheanacho, argued in the motion that Binance's activities in Nigeria include elements of criminality.
This contention likely formed the basis for the EFCC's request for data and information from Binance.
According to Sections 38 of the EFCC Act, 2004, and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended), entities like Binance are required to report suspicious transactions to authorities, with penalties for non-compliance.
So, the assertion made by the lawyer representing the anti-graft agency could be seen as a response to Binance's alleged failure to comply with these legal obligations.
In an affidavit, EFCC operative Hamma Bello emphasized the urgency to conclude the ongoing probe following intelligence received regarding alleged involvement in money laundering and terrorism financing through the Binance crypto exchange platform.
Bello stated that the EFCC team found evidence of users utilizing the platform for illicit activities, including price discovery, confirmation, and market manipulation. These activities were reported to have caused notable distortions in the foreign exchange market and contributed to the further devaluation of the naira against other currencies.
The commission asserted that the negative impacts of these activities on the Nigerian economy were conveyed to Binance operators, prompting the request to remove the naira from Binance's trading platform.
Nathaniel Luz, CEO of Flincap, commented in an interview with Cointelegraph, suggesting that while the court order may benefit the Nigerian government, the most effective approach for resolving the issue between Binance and the Nigerian government would be to engage in a roundtable discussion.
This could provide an opportunity for constructive dialogue and potentially lead to a mutually beneficial resolution.
Bayo Onanuga, presidential adviser on information and strategy, contended that platforms like Binance, along with other crypto platforms, manipulated the naira and instigated a significant decline in the local fiat currency.
Additionally, he proposed the idea of banning platforms such as Binance within the country.
This stance reflects concerns about the potential negative impacts of cryptocurrency trading on the stability of the national currency and the broader economy.
Nigeria has seen significant growth in its cryptocurrency economy in recent years, establishing itself as one of the fastest-growing crypto economies globally.
Additionally, in 2023, Nigeria ranked as the second-biggest economy in terms of crypto adoption.
This highlights the increasing popularity and adoption of cryptocurrencies within the country, signaling a growing interest in digital assets among Nigerian users.
