Nigerian authorities have detained two senior officials of the world’s largest cryptocurrency exchange Binance, Financial Times reported on Wednesday.
The detention of the officials came a day after Nigeria’s central bank governor Olayemi Cardoso said that about $26 billion mostly from unknown sources flowed through the exchange in the last one year.
Nigeria last week clamped down on cryptocurrency marketplaces as it continued to battle volatile foreign exchange that has seen the value of the naira plummet to an all-time low in recent weeks.
The officials came to Nigeria after the country banned several cryptocurrency trading websites last week.
Their passports were seized and the officials detained by the office of the country’s national security adviser, the Financial Times reported.
“Certain practices go on that indicate illicit flows going through a number of these entities,” Cardoso said on Tuesday after a meeting of the bank’s Monetary Policy Committee.
“In the case of Binance, in the last one year alone, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify.”
Cardoso said the authorities are working on controlling the situation and shutting out market manipulators.
Binance has come under intense regulatory scrutiny in recent weeks in Nigeria and the United States.Â
Bayo Onanuga, a spokesperson for Nigerian President Bola Tinubu accused Binance of “hijacking” the role of the Central Bank of Nigeria (CBN) in determining the value of naira in foreign exchange.
Although Binance claimed that it is committed to adherence to local regulations and laws in Nigeria, Onanuga urged government agencies to move against the cryptocurrency platform and suggested another ban on cryptocurrency exchange in Nigeria.
“Binance, facing regulatory showdown in many countries, and causing disruptions in the currency market, should not be allowed to dictate the value of the Naira, not on its crypto exchange platform,” Onanuga tweeted.
Last Friday, an American judge asked Binance Holdings Ltd (BHL) to pay $4.3 billion for violations of anti-money laundering and sanctions laws in a settlement.
US District Judge Richard Jones in Washington state approved a plea agreement between Binance and federal prosecutors which calls for the company to pay a fine of $1.8 billion and forfeiture of $2.5 billion.
“Binance profited from the US financial system without playing by its rules and, as a result, criminals used the exchange to move hundreds of millions of dollars of stolen funds and illicit proceeds,” the government said in its sentencing memorandum.
It said the penalty was the largest ever imposed against a money services business and was “commensurate with the severity of Binance’s criminal conduct.”
