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$10b fine: Binance suspends crypto trading in naira

Following Federal Government’s demand that cryptocurrency exchange, Binance pay $10 billion for exchange rate manipulation, the company announced that it will stop providing all services related to the naira.

The exchange’s decision comes amid Nigeria’s crackdown on the global crypto exchange.

In a statement, the company said that starting from 8:00 UTC on March 8, all remaining naira balances in Binance users’ accounts will be automatically converted to USDT stablecoin.

The company advised users to withdraw naira even as naira deposits was suspended yesterday. Binance also said it will no support naira in spot trading, P2P, Auto Invest, and Binance Pay.

“Any remaining naira balances in users’ Binance accounts will be automatically converted to USDT,” the exchange said.

The Nation reported the arrest of two Binance officials by authorities over allegations of “illegal transactions” in Nigeria.

The Federal Government is also demanding at least $10 billion as retribution from Binance amid a crackdown on the crypto exchange platform in desperate moves to salvage the value of the naira, the nation’s currency.

The Binance exchange is a leading cryptocurrency exchange founded in 2017.

It features a strong focus on altcoin trading. Binance offers crypto-to-crypto trading in more than 350 cryptocurrencies and virtual tokens, including bitcoin, ether, litecoin, dogecoin, and its own coin, BNB.

Posting on its website on Tuesday, Binance said the conversion rate for automatic conversions will be 1 USDT per 1,515.13 naira.

Meanwhile, the House of Representatives has resolved to investigate the current status of Cryptocurrency, blockchain, digital asset transactions, all the online peer-to-peer (P2P) marketplace, utility sharing based platforms and their practices, in Nigeria to identify threats to National Security and gaps in legislative framework, statutes, and regulations to the detriment of the country.

Others to be investigated in line with the resolution following a motion by Isiaka Ibrahim (APC, Ogun), international money transfer operators, payment gateways and platforms, cloud computing, infrastructure (networks).

They are also to investigate the current status of the E-Naira on the global cryptocurrency platform, the cost incurred, processes undertaken, and statutory compliance in creating the digital currency.

The House also resolved to engage all relevant stakeholders to initiate necessary processes for establishing required legislation and regulations, while establishing the profile of operators in the sector such as legal status, parent company, and assess their compliance with our existing statutes or complicity in infractions against Nigeria including money laundering, illicit transactions, currency speculation and bad practices.

The House also resolved to superintend the engagement of the office of the NSA, other relevant agencies, cryptocurrency exchanges, and stakeholders in tracking, Identifying, and recovering illicit and laundered funds or assets.

The House is to ensure that equity, probity, transparency, the rule of law, and international best practices are observed by the government in investigating cryptocurrency exchanges and others.

Moving the motion, Isiaka spoke of t growing global concerns about the national security implications of cryptocurrency transactions through cryptocurrency exchanges including consumer and investor security as these exchanges are said to enable money laundering by criminals and terrorists for their illicit activities.

He said that as part of its sweeping market friendly reforms designed to attract substantial foreign direct investment into the countries struggling economy, this administration reversed the ban on cryptocurrency transactions in Nigeria imposed by the previous administration.
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He said that the current actions by the government should not be perceived by the global community and international investors as a policy somersault so early in the life of the administration and the existence of a hostile business environment.

He took cognisance of the concerns expressed by the CBN with regards to the likelihood of illicit transactions and money laundering on the cryptocurrency exchanges and their seeming use as an alternative platform for determining local foreign exchange rates.

He said the US Treasury 2022 National Money Laundering Risk Assessment indicates that fiat and traditional financial activities contribute substantially higher (over 200%) than digital assets transactions to global money laundering activities.

He said the conflict with the government about whether or not the crypto exchanges are determining the local foreign exchange rate and usurping the functions of the national bank does not appear to arise in other developed climes where appropriate statutes and regulations have been enacted and enforced to superintend crypto and other digital asset transactions.

He argued that the government should not be seen to be trying to “throw away the baby with the bath water” without considering the benefits of digital asset transactions to the country.


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