Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC

Jimmy Aki
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A Nigerian federal high court has ordered Binance Holdings Limited to provide the Economic and Financial Crime Commission (EFCC) with comprehensive data and trade history of all Nigerians trading on its platform.

Justice Emeka Nwite gave the interim ruling on February 29, 2024, following an ex-parte motion raised by Ekele Iheanancho, the EFCC’s legal attorney.

Data to Unravel Money Laundering by Nigerians on Binance

According to local news outlet Punch, the court interim order was granted to allow the EFCC to investigate alleged money laundering violations and terrorism financing activities processed by Nigerians on Binance.

This means the anti-financial crime agency has the legal backing to request and access Nigerian traders on the exchange and conduct investigations.

Nonetheless, it is worth noting that Justice Nwite’s ruling stemmed from an ex-parte motion filed by the EFCC, which was based on specific sections of the Nigerian constitution.

This includes Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the EFCC Act, 2004. Other are Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and the inherent powers of the court.

The highlighted legal provisions mandated the report of suspicious transactions to the Nigerian authorities and penalties for non-compliance.

The ex-parte motion filed by the EFCC claimed that Binance trading activities in the Nigeria region feature obvious elements of criminality.

An Affidavit was also filed by Hamma Bello, an operative of the anti-graft agency and member of its Special Investigation Team (SIT) within the Office of the National Security Adviser (ONSA). This was in support of the motion brought forward by the EFCC.

According to local news media, the filed document stated that the EFCC received intelligence on money laundering and terror financing on Binance. This led to the commencement of a thorough investigation by the EFCC.

Nigeria Trading Volume On Binance Capped at $21.6 Billion for 2023: The Looming Danger

Bello further stated that Binance’s request and compliance to release detailed data on Nigerian traders on Binance is of the utmost public interest and national security.

According to him, “The team uncovered users who have been using the platform for price discovery, confirmation, and market manipulation, which has caused tremendous distortions in the market, resulting in the Naira losing its value against other currencies.”

Bello reiterated that the damage caused by the Binance was clearly explained to the representatives of the exchange.

It could be recalled that the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, accused Binance of facilitating $26 billion of illicit funds in Nigeria in 2023.

Meanwhile, the crypto exchange has proceeded to release trading volume data by Nigerians for 2023, which is capped at $21.6 billion.

This was closely followed by a request to delist the Naira on March 5 to mitigate depreciation.

Binance

As the case unfolds, crypto enthusiasts, investors, and experts in Nigeria believe the exchange won’t succumb to Nigeria’s court demands.

This is because an act of meeting the demands of the court would go against the ethos of cryptocurrency and decentralization.

 

Dialogue or Sanction: Will Crypto Win?

Case observers believed the potential exit of Binance from Nigeria looms and could affect the growth of cryptocurrency and blockchain technology in the country.

According to Anndy Lian, a blockchain expert, Nigeria had the world’s highest proportion of crypto users.

Between June 2022 and June 2023, it had a 9% year-over-year growth of $56.7 billion in crypto transactions.

However, these figures could drop if the world’s largest crypto exchange by trading volume restricts trading operations in Nigeria.

While the Nigerian government and the EFCC believe this will help the Naira gain more value, citizens have shared concerns about basic blame games and lost priorities.

If a dialogue between both parties does not happen soon, Nigerian traders may have to look for other alternatives for their trading needs.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.