The Federal High Court sitting in Abuja has ordered world’s largest Cryptocurrency company, Binance Holdings Limited to disclose the names and transaction details of all its most prominent users in Nigeria.
Justice Emeka Nwite gave Binance the interim order to provide the Economic and Financial Crimes Commission (EFCC) with a comprehensive information of all the prominent persons from Nigeria trading on its platform.
Nwite gave the order after he had ruled on the ex parte motion moved by the EFCC’s lawyer, Ekele Iheanacho.
“The applicant’s application dated and filed 29th February, 2024, is hereby granted as prayed,” said Justice Nwite.
“That an order of this honourable court is hereby made directing the operators of Binance to provide the commission with comprehensive data/information relating to all persons from Nigeria trading on its platform.”
Nwite’s interim order has also given the EFCC the power to discover more about the alleged money laundering and terrorism financing on the cryptocurrency exchange platform.
“The ex parte motion marked FHC/ABJ/CS/259/2024 was brought pursuant to Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the Economic and Financial Crimes Establishment Act, 2004 and Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and the inherent powers of the court,” read a statement.
“In the affidavit in support of the motion deposed to by Hamma Bello, an operative of the EFCC, he said he was attached to the Special Investigation Team (SIT) of the commission domiciled in the Office of the National Security Adviser (ONSA).
“Mr Bello averred that, following the inauguration of the Technical Committee on Currency Stability and Forex Manipulation by the ONSA, the SIT “received an intelligence stating the nefarious activities (money laundering and terrorism financing) on Binance.”
Presidency and regulatory sources, meanwhile, said the Nigerian government decided to move against Binance and other crypto firms following reports that currency speculators and money launderers were using them to execute criminal activities.
The authorities believe that the ‘criminal activities’ going on on platforms are contributing significantly to the weakening of the naira.
In September 2023, Nigeria’s Securities and Exchange Commission (SEC) placed a disclaimer on Binance Nigeria Limited, saying the platform was “neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal”.
Despite the warning by the regulatory agency, the firm continued its operation, attracting huge patronage especially among urban youths and suspected speculators and money launderers.
Aside suspicions of economic sabotage, officials also speak of national security concerns as the platforms are often patronised by other criminal groups including for payment of ransom.
Law enforcement sources say the digital asset platforms are also routinely deployed for manipulation of forex values through fake deals that serve to prop up values or cause a fall.
Binance, however, discontinued its naira services, taking that decision days after two of its officials were detained in Nigeria.
Binance also told its Nigerian users to either withdraw their naira deposits, trade their assets denominated in the currency or convert their naira holdings into crypto before the discontinuation came into effect on March 8, 2024.
