$26bn flowed through Binance Nigeria in one year — CBN

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), has disclosed that $26 billion flowed through Binance Nigeria in one year.

He said these funds were from sources and users the apex bank cannot identify. He revealed this during the Monetary Policy Committee Meeting in Abuja on Tuesday.

While answering questions about the activities of cryptocurrency platforms like Binance, Cardoso said the CBN has a responsibility to protect Nigerians and has been collaborating with other arms of the government to confirm some of their fears.

He said: “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 last one year alone, $26 billion have passed through Binance Nigeria from sources and users we cannot adequately identify.”

Amidst allegations that the country has been arresting some individuals in the crypto space, Cardoso confirmed an ongoing collaboration between different agencies, including the Police, Economic and Financial Crimes Commission, and the Office of the National Security Adviser.

He said the bank would share more information regarding the collaboration in due course. “But suffice to say that we are determined to do everything it takes to ensure that we take charge of our market and not allow others to manipulate it… We will not accept it and will do everything possible to prevent any infraction.”

Cardoso’s statement on the crypto platform comes a couple of days after Nigeria asked its telecommunications firms to restrict access to the websites of cryptocurrency firms.

The restriction on crypto websites aims to slow currency speculation activities in the country. In an email confirming the restriction, the firm said: “We are aware that some users are experiencing issues accessing binance.com, along with other platforms in the industry. Only users attempting to access the website are impacted, although the app is currently available.”

Binance has since clarified that its platform is not for currency pricing. “We continue to actively engage with regulators, policymakers and other relevant stakeholders to foster an open, transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.”

Nigeria is one of the largest peer-to-peer crypto markets in the world. Between July 2022 and June 2023, crypto transactions in the country reached $56.7 billion, according to Chainalysis.

At the time, the blockchain research firm said: “Perhaps even more notable is that Nigeria’s crypto economy continues to grow despite market turmoil. In fact, Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied.”

The firm said Nigerians were adopting crypto to preserve the value of their savings against rising inflation and debt. Nigeria’s inflation rate surged from 21.82 percent as of January 2023 to 29.90 percent last month.

The country’s renewed interest in clamping down on crypto activities came despite a recent CBN guideline meant to govern the digital asset space. In December 2023, the apex bank lifted its February 2021 ban on crypto transactions. This was meant to usher in a new government approach to crypto.

Industry experts believe that the recent moves against crypto activities in the country will not stem the naira’s decline in the long run.

“The government is focusing on the wrong thing in their effort to tackle the naira’s issue,” Chimezie Chuta, founder and coordinator of Blockchain Nigeria User Group, told BusinessDay.