Nigerian Official Sets the Record Straight on Alleged $10 Billion Binance Penalty Amidst Strengthening Crypto Regulations

Bayo Onanuga, special adviser to the Nigerian president on information and strategy, has addressed the alleged imposition of a $10 billion fine on Binance, emphasizing that earlier reports were based on misquotation and misunderstanding.

He clarified that the government has not made any final decision about the purported fine and that his previous statements were misrepresented.

Onanuga specifies that his comments centered on the potential of imposing a fine, indicating that no concrete decisions have been made. This clarification comes at a time of increased regulatory scrutiny on cryptocurrency exchanges in Nigeria, with a focus on safeguarding the integrity of the Nigerian naira.

Discontinuation of Naira in Peer-to-Peer (P2P) Trading

Responding to increased regulatory pressure, Binance discontinues the use of the naira in its P2P trading services as of February 28. The P2P platform, popular among Nigerian users since 2021, facilitated direct transactions between buyers and sellers without intermediaries.

This move is a strategic response to the evolving regulatory landscape in Nigeria.

Central Bank of Nigeria’s (CBN) Concerns and Government Actions

The CBN expresses concerns about “suspicious flows” of funds through Binance’s Nigerian operations, reporting $26 billion in transactions from unverified sources in 2023.

This raises alarms about potential financial risks, leading to further government actions. Two senior Binance officials are detained in Abuja by the National Security Adviser’s office, signifying the government’s commitment to monitoring and potentially regulating cryptocurrency exchanges to prevent undue speculation on the naira.

Policy Shift and Regulatory Developments

Despite challenges, the CBN lifted a two-year ban on banks’ involvement in crypto transactions in December 2023. Guidelines have been issued for regulating virtual asset service providers.

Nigeria’s multifaceted approach to digital currencies is evident with the launch of a central bank digital currency in 2022 and the introduction of the naira-pegged cNGN stablecoin through the Africa Stablecoin Consortium in a regulatory sandbox in February.

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