I read the headlines with Dismay. I don’t think it made a good read to see Binance officials had been detained in Nigeria. The first thing that came to my mind was, “this doesn’t look good”.
It helped to know that the embassies of the Binance officials are involved and Binance itself is working with the Nigerian government to get to the root of the issues.
That said, when it comes to Nigeria’s challenges with Binance and other such platforms, it’s gone beyond the aesthetics of wanting to look good for investors or headline writers.
The CBN Governor, Mr Yemi Cardoso said some $26b had passed through Binance in Nigeria, without trace. Emphasis on “without trace”.
There is no responsible government in the world that’d allow such flow of money through its system without being able to account for the sources.
Government has a responsibility to do right by its citizens first, before any other considerations. Beyond economic ramifications, there are security considerations that extend beyond Nigeria — Nigeria’s anti-terrorism partners won’t be pleased to hear the numbers being moved in the dark outside of government’s knowledge.
More so, the issues Nigeria is dealing with when it comes to the matter at hand include:
– manipulation of the FOREX market (apparent to everyone).
– illicit financial flows.
– national security.
Other issues include.
Lack of Regulatory compliance.
Lack of local registration.
I am certain more information will come to light in the coming days and weeks.
There is a reason countries like Canada, the Netherlands and Malaysia have had run-ins with Binance. They have also had challenges in the UK. And only 3 months or so ago were fined $4.3b by the U.S. government. $1.8b of that sum was a criminal fine. The founder of Binance, Changpeng Zhao (CZ), is awaiting sentencing on this matter. So, there is some precedence here.
Nigeria’s President Tinubu is fighting on many fronts, especially on the economy and security
Unlike the American charges though, Nigeria’s haven’t been as open. Could also be because the intentions are different. Nigeria isn’t — at the moment — looking to charge Binance or its associates for any crimes. Not to mention with Binance not domiciled in Nigeria, the government couldn’t account for the sort of leverage the American government had within its grasp.
No country in the world will allow Nigerians (or indeed any nationals) run such an enterprise with the aforementioned risks within its borders. There is no reason why Nigeria should permit same. Especially now the cost of indifference and inaction are biting hard, despite the ongoing reversal of some of the effects.
Olayemi Cardoso, the Central Bank of Nigeria Governor took the first shot at Binance.
If Nigeria were a sophisticated economy with enough size like that of those that already set Binance and other such platforms in line, it wouldn’t be threatened by “what foreign investors would perceive” based on its attempt to do right by its people. That it isn’t that economy yet shouldn’t get in the way of doing the right thing for its people anyway.
Some people may frown at the method, and they could be justified. However, the intention cannot be faulted.
Optics are essential, but some issues are too critical to be left in the subjective hands of “what will people say?” The Nigerian people, its security and economy matter too. They indeed matter more in this case. These and other measures being taken by the government will hopefully restore some confidence in the economy and also help effect some measure of control on national security.
PS: whilst I don’t trade on Binance, I bought some coins using the platform in 2021. I have held/ignored them since then!
Written by JJ. Omojuwa
