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Binance Executives’ Detention Could Spark Diplomatic Crisis in Nigeria

2 mins
Updated by Ali M.
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In Brief

  • The Nigerian government detained two Binance senior executives amid allegations of Binance's role in destabilizing the naira.
  • Nigeria introduced new financial reforms that catalyzed a clampdown on crypto businesses suspected of manipulating the naira.
  • Detentions of US and UK-linked executives sparked discussions around diplomatic policies and intervention for crypto persons.
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Nigeria’s detention of two Binance executives enters its third week as the government investigates the crypto exchange’s alleged role in manipulating the naira.

Amid the detention, Nigeria demands that Binance provide information on its top 100 users and six months’ transaction history of all users. Nigeria’s national security adviser also seeks a resolution on any outstanding tax liabilities from Binance.

Nigeria Targets Binance Amid Economic Reforms

This detention period coincides with government initiatives to stabilize the economy after the devaluation of Nigeria’s currency. President Bola Tinubu recently introduced several financial reforms, including a new exchange rate calculation for the naira.

However, the government has also alleged that crypto companies like Binance weaken the naira by enabling criminal currency manipulation. Following a plea from a Nigerian regulator to ban Binance, the country blocked access to Binance’s peer-to-peer crypto exchange and several other platforms.

Central bank governor Olayemi Cardoso said it had been difficult to trace $26 billion in suspected illicit and financial flows through Binance.

As a result, local authorities also detained Binance’s regional manager for Africa, Nadeem Anjarwalla, and Tigran Gambaryan, Binance’s financial crime compliance head. They also seized the pair’s phones and passports per court order and imposed a $10 billion fine on Binance.

Read more: 7 Best Binance Alternatives in 2024

The detention of Anjarwalla and Gambaryan could create diplomatic tensions due to their ties to the UK and the US. Crypto venture capitalist Nic Carter reflected that the lack of US intervention indicates an inconsistency in diplomatic policies.

“The Nigeria/Binance situation is pretty sickening. The US should obviously intervene, but a US passport under the completely ineffectual Biden regime means very little these days… When a WBNA player gets detained: press conference, pressure, high-profile prisoner swap… When a decorated former federal agent is kidnapped and held to ransom, but he works for a crypto company: I sleep,” Carter wrote.

Nigerian Crypto Exchange Volume
Nigerian Crypto Exchange Volume. Source: Chainalysis

The US Embassy said it knew of the situation but could not comment further. The UK Foreign Office has confirmed its contact with local authorities over Anjarwalla’s detention.

“We are supporting a British man detained in Nigeria and are in contact with the local authorities,” the UK Office said.

Read more: Binance Review 2024: Is It the Right Crypto Exchange for You?

The Central Bank of Nigeria was also suspected of cracking down on Binance P2P as early as November 2023. Chainalysis’ 2023 Global Crypto Adoption Index ranked Nigeria the top country globally for trading volumes on peer-to-peer cryptocurrency exchanges.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...