Two senior executives from Binance, the world’s leading cryptocurrency exchange, have been detained in Nigeria.

This action comes on the heels of the Nigerian government’s efforts to stabilize the naira. It has seen unprecedented volatility, leading to an inflation surge to a 30-year high of 29.9%.

The Binance executives had arrived in Nigeria following the government’s ban on several cryptocurrency trading platforms. However, they found themselves in the custody of the national security adviser’s office, with their passports confiscated. The specifics of their detention highlight the escalating tensions between Nigerian authorities and the crypto market, which has become a haven for speculative trading on the naira.

Nigeria’s central bank governor, Olayemi Cardoso, cited Binance in a recent press conference. He expressed concerns over the illicit and suspicious financial flows through crypto platforms. According to Cardoso, an alarming $26 billion has been transacted through Binance Nigeria in the past year. This has raised eyebrows over the sources and users involved in these transactions.

“We 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,” Cardoso said.

In response to these developments, Binance has suspended the trading of the naira against major cryptocurrencies. This move signals the exchange’s immediate reaction to the regulatory heat it’s facing in Nigeria.

Read more: 7 Best Binance Alternatives in 2024

The Nigerian government’s crackdown is part of a broader strategy to rein in the speculative trading that has contributed to the naira’s devaluation. By targeting crypto exchanges like Binance, authorities aim to establish a more controlled and transparent financial environment. This includes demands from the anti-corruption agency and national security adviser for a comprehensive list of Binance’s Nigerian users since its inception.

Amidst this regulatory turmoil, Binance faces its own internal challenges. Especially, following the resignation of its founder, Changpeng Zhao, after pleading guilty to charges related to money laundering. The recent events in Nigeria add another layer of complexity to Binance’s efforts to navigate the global regulatory landscape and maintain its dominance in the crypto market.

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