Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC
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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.
Justice Emeka Nwite of a federal high court sitting in Abuja ordered BINANCE to provide the Economic and Financial Crimes Commission (EFCC) with the comprehensive data or information of all persons from Nigeria trading on its platform.
— Af𝒐 𝒐f l𝒂w (@afoguarantor100) March 18, 2024
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.”
Tue 19 Mar, 2024 • 11:00 AM
💵 1 USD ⇛ ₦1,566.750
💷 1 GBP ⇛ ₦1,961.029
💶 1 EUR ⇛ ₦1,673.613
💶 1 CAD ⇛ ₦1,150.391
v1.1.6— ₦aira Rates (@naira_rates) March 19, 2024
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.
The game of chess has started as Binance responds to Nigeria: "According to data provided by Binance to the ONSA [Office of National Security Adviser], Nigerian trading volume on the platform in 2023 alone amounted to $21.6 million." Note "million", not "billion".
Recall that… pic.twitter.com/2SfWRly3lB
— Ndubuisi Ekekwe (@ndekekwe) March 18, 2024
This was closely followed by a request to delist the Naira on March 5 to mitigate depreciation.
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.
Binance to depart Nigerian market, ends services in local currency. pic.twitter.com/7IPtAtMEY6
— YabaLeftOnline (@yabaleftonline) March 5, 2024
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.