In a significant development, the Nigerian House of Representatives Committee on Financial Crimes has issued a summons to Richard Teng, the CEO of the global cryptocurrency exchange Binance. This move comes amid growing concerns over potential terrorism financing and money laundering activities associated with the platform. The committee, led by Chair Ginger Onwusibe, has given Binance’s management until March 4, 2024, to make an appearance, as reported by the local news outlet Punch.
The urgency of this summons follows allegations by the governor of the Central Bank of Nigeria (CBN) on February 27, highlighting “suspicious flows” of funds through Binance in the year 2023. Onwusibe expressed severe disappointment over Teng’s failure to attend a hearing scheduled for December 18, 2023, despite receiving multiple invitations. This situation underscores a broader concern about the oversight and regulation of foreign businesses operating within Nigerian financial markets.
The committee’s actions are indicative of Nigeria’s intensified efforts to clamp down on financial crimes, especially those facilitated by foreign entities. Onwusibe has emphasized the committee’s constitutional mandate to protect Nigerians from such offenses. This stance is further bolstered by reports from Punch indicating that the National Security Adviser’s office has detained two senior officials from Binance in Abuja. This move is part of a broader crackdown aimed at cryptocurrency exchanges to mitigate speculation on the Nigerian naira.
In response to these governmental pressures, Binance has recently removed the naira from its peer-to-peer (P2P) trading service. The P2P platform had gained popularity in Nigeria, particularly after the government’s ban on the crypto industry during former President Muhammadu Buhari’s tenure. This ban was lifted in December 2023, with the CBN issuing guidelines for the regulation of virtual asset service providers and reinstating banks’ ability to engage in crypto transactions.
Nigeria’s engagement with digital currencies has been notably proactive. It became the second country worldwide to launch a central bank digital currency in 2022. Furthermore, in February, the Africa Stablecoin Consortium unveiled the naira-pegged cNGN stablecoin within a CBN regulatory sandbox, marking a significant step in the country’s digital finance landscape.
The unfolding scenario presents a critical juncture for both the Nigerian government and Binance. It underscores the delicate balance between fostering innovation in the burgeoning sector of digital currencies and ensuring robust mechanisms are in place to prevent financial crimes.
