Nigeria is reportedly still detaining two Binance executives while it deals with the currency crisis.
As the Wall Street Journal reported on Tuesday (March 11), the arrests occur as Africa's largest economy blames the world's largest cryptocurrency company for causing the value of its currency to plummet.
To help solve the problem, Binance's head of financial crimes compliance, Tigran Gambaryan — a US citizen and former IRS agent — flew to Nigeria last month. He was joined by Nadeem Angarwala, a British and Kenyan national and Binance's regional director for Africa.
Both men remain under house arrest in Nigeria, although they have not been charged with any crime, the Wall Street Journal said, citing information from families of Binance employees.
This report follows a separate report from last month that indicated that national security officers had arrested two unnamed Binance executives after their arrival in Nigeria.
This came after the government said Binance was operating illegally in Nigeria, costing the country a major source of tax revenue.
“It's not necessarily an arrest per se,” Zachary Miginyawa, a spokesman for the national security adviser, told Bloomberg News. “Meetings and discussions are continuing. It is a national security issue and there is an interagency process.”
Central Bank of Nigeria Governor, Olayemi Cardoso, cited Binance during a press conference last month after announcing a record increase in interest rates to help boost the country's currency.
Criticizing “illicit flows,” Cardoso said $26 billion passed through Binance in Nigeria “from sources and users that we cannot adequately identify.”
Another government official, Bayo Onanuga, an adviser to Nigerian President Bola Tinubu, wrote on X that cryptocurrency companies “blatantly set Nigeria’s exchange rate,” replacing the role of the country’s central bank.
This has prompted the country to ask telecom companies to ban platforms such as Binance and Coinbase, a move that represents a shift in the government's stance.
Just last year, the country's central bank eased its nearly three-year-old ban on cryptocurrency transactions, though it still calls for regulation of virtual asset service providers (VASPs), including cryptocurrencies and crypto assets.
A Wall Street Journal report notes that Nigerians have embraced cryptocurrencies in recent years to protect their savings as inflation rises to 30%. Nigeria has the second-highest rate of cryptocurrency adoption in the world next to India, with residents carrying out nearly $60 billion worth of cryptocurrency transactions in the 12 months to June 2023, the report says, citing data from Chainalysis.
