Dr. Olayemi Cardoso, Nigeria’s Central Bank Governor, has stated that about $26 billion passed through Binance Nigeria in the last one year.
He dropped this hint in response to the questions on the activities of cryptocurrency platforms like Binance, especially how the apex bank thought about balancing currency manipulation and not stifling innovation.
In response, Cardoso said that because the CBN has a responsibility to protect Nigerians (and investment community) it has been collaborating with other arms of the government to confirm some of their fears.
A check by Techeconomy indicated that, in a concerted effort to safeguard Nigeria’s foreign exchange market and combat speculative activities, the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria joined forces to tackle challenges in the market.
However, the effectiveness of these initiatives is being undermined by the activities of forex market speculators, both domestic and international, operating through various channels, thereby exacerbating the depreciation of the Nigerian naira and contributing to inflation and economic instability.
The CBN had initiated a comprehensive strategy to enhance liquidity in the forex market, including unifying the market segments, clearing outstanding forex obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.
Again, to reduce the pressure on the naira, the Economic and Financial Crimes Commission (EFCC) also raised a 7,000-man special task force across its 14 zonal commands to clamp down on dollar racketeers.
Yet, recent intelligence reports have highlighted continued illicit activities within the Nigerian foreign exchange market, causing ONSA and CBN to embark on a collaborative approach to tackle these infractions.
The partnership involved a coordinated effort with key law enforcement agencies, including the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service, and the Nigeria Financial Intelligence Unit (NFIU).
The primary objective of which is to systematically identify, thoroughly investigate and appropriately penalize individuals and organizations involved in wrongful activities within the Forex market.
By leveraging the expertise of these agencies, we aim to deter malicious practices, protect investor interests, and promote sustainable economic growth.
Speaking further, the CBN Boss noted “they are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best.
In the case of Binance, in the last one year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify”
He however assured Nigerians that they are “determined” to do anything it takes to take charge of their market and not allow others to “manipulate our market in a way that ends up distortionary and sub-optimizes for all Nigerians”, which he said will not be accepted, as they will do their best to ensure the “infractions” do not take place.
In response, Binance stated that it has taken some actions to adjust trading on its platform by Nigerians to address what it described as an unusual currency movement.
While many Nigerians have been complaining of facing restrictions with buying and selling USDT on the platform since Tuesday, Binance said its action was “to protect users and prevent any abuse.”
Binance also distanced itself from the forex debacle in Nigeria saying its platform is “market-driven and not intended to be a proxy for currency pricing in Nigeria.”
