Nigerian court orders Binance to share user data

The world’s largest cryptocurrency exchange Binance has just been ordered by a Nigerian court to provide the Economic and Financial Crimes Commission (EFCC) with comprehensive data on all Nigerian users trading on its platform.

The directive, which was delivered in an interim ruling by Justice Emeka Nwite on February 29, follows an ex-parte motion filed by the EFCC against Binance. The motion alleged that Binance’s activities in Nigeria contain elements of criminality, contrary to Sections 38 of the EFCC Act, 2004, and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) .

An ex-parte motion is an injunction where no hearing takes place and where the opposing party is not heard. Such a ban is only possible in cases of great urgency and obvious infringement (source: ipmc.nl).

EFCC operative Hamma Bello, in an affidavit, stated the need to conclude an ongoing investigation after receiving intelligence on alleged money laundering and terrorist financing involving Binance.

The EFCC team in the investigation found that users were using the platform for illegal activities including price manipulation, which led to disruptions in the foreign exchange market and devaluation of the naira, leading to the request to remove the naira from Binance’s trading platform. In response, Nathaniel Luz, CEO of Flincap, proposed a conversation between Binance and the Nigerian government.

Presidential advisor Bayo Onanuga in an earlier statement accused platforms such as Binance of manipulating the local currency and causing a huge drop. The official also suggested banning platforms like Binance in the country.

Previously, two board members of the exchange – Tigran Gambaryan and Nadeem Anjarwalla – were also held against their will in Nigeria for two weeks amid allegations that the exchange made illegal transaction profits locally, according to multiple media reports.

Nigeria has become one of the fastest growing crypto economies globally and the second largest in crypto adoption by 2023. It will therefore be very interesting to keep an eye on how the government handles these types of issues as it will be a significant could have an impact on the entire crypto market.