By Ahmed Oluwasanjo
Compiled by: Moni, Odaily Planet Daily
On the last day of February, a piece of news related to Binance attracted the attention of the crypto community - the West African country of Nigeria demanded that Binance pay $10 billion in compensation. However, according to the latest news, the matter seems to have reversed. What happened behind the scenes?
Next, Odaily Planet Daily will help you filter out the causes and consequences.
Binance vs. Nigeria Timeline
On February 28, Reuters revealed that two senior executives of Binance were detained in Nigeria. People familiar with the matter revealed that after Nigeria decided to ban several cryptocurrency trading sites last week, these executives flew to Nigeria, but they were detained by the country’s National Security Advisor’s Office and their passports were confiscated.
On February 29, multiple local media reported that Nigeria’s Central Bank Governor Olayemi Cardoso said that $26 billion worth of untraceable funds flowed through Binance Nigeria last year. Nigeria is facing a foreign exchange crisis and is looking for ways to limit capital outflows as the local currency, the naira, hit a record low on Wednesday. In addition to measures such as taxes on foreign workers, calls to restrict cryptocurrencies in the country have recently made headlines again, and local users will be blocked from accessing certain crypto exchanges - including Binance.
In fact, Nigeria has always been a fast adopter of cryptocurrencies, but due to the problem of fund tracing, the services of some exchanges have caused a lot of "headaches" for the country's regulators. Local media Nairametrics reported that the Central Bank of Nigeria is working with multiple government agencies and the police to further investigate these fund flows. As early as 2023, Binance and an entity called "Binance Nigeria Limited" had been warned by the country's securities regulator for "illegal activities."
On March 1, the BBC report exacerbated the situation, reporting that Nigerian presidential media adviser Bayo Onanuga demanded that Binance pay at least $10 billion in compensation. This request was made against the backdrop of Nigeria’s crackdown on cryptocurrency exchanges and the devaluation of its currency. He also stated that if Binance did not stop, it would destroy the Nigerian economy because of the arbitrarily fixed foreign exchange rates.
On the same day, Binance removed the Nigerian currency, the naira, from its peer-to-peer (P2P) functionality.
A big reversal? Nigeria changed its statement: "Never said the fine on Binance was $10 billion"
Just after several media reported that it would be fined $10 billion in Nigeria, a response from Binance co-founder He Yi circulated in the community, which read: "Who is worth $10 billion?"
Soon, things seemed to be turning around.
According to the latest news from local media Gazettengr, Binance said last Friday that it had not held any negotiations with the Nigerian government on a possible fine of up to $10 billion, which apparently contradicts a report published by the BBC. An unnamed official of the exchange said:
“We recently discussed with Nigeria how to resolve the issue, but we did not hear any request for $10 billion.”
Interestingly, Binance did not seem to be in the mood to discuss paying a hefty sum to the Nigerian government to restore recently severed services, or releasing executives detained for alleged involvement in manipulation. Instead, the Binance official added:
“Binance’s goal is to maintain good relations with the Nigerian government and people and we hope to see services in Nigeria restored soon, but we have no intention of paying fines for people or services.”
What happened next surprised the spectators.
Bayo Onanuga, the media adviser to the Nigerian president, urgently clarified that his statements to the BBC were distorted by the British media and that he never said the company had been informed or that the Nigerian regulator had decided to fine. Bayo Onanuga explained:
"I said that the Nigerian government might impose a huge fine on Binance for what happened, but I never said that Binance had been informed of the fine, and I never said that the amount of the fine was definitely $10 billion. I just said that a certain amount of fine might be levied, and that's because nothing has been finalized yet." (Bayo Onanuga repeatedly emphasized the uncertainty of the fine).
It is worth mentioning that although it is not clear what measures Binance has taken to release its personnel, according to Bayo Onanuga, the detained "Binance employees have cooperated with the Nigerian government to provide information."
In summary, "Nigeria will impose a $10 billion fine on Binance" is likely a big blunder, and the BBC's misleading report caused the information to be erroneously fermented. After all, "Who is worth $10 billion?"
