Reported by Chidirim Ndeche

Binance’s operation in Africa’s biggest cryptocurrency market is under intense scrutiny, with Nigerian authorities accusing the crypto giant and a host of other exchanges of infractions including currency manipulation and facilitating transfers of illicit funds.

With one Binance executive in custody in Nigeria, and a second having fled the country after having been detained, Nigerian authorities have singled out the exchange for circumventing Nigerian laws and for tax evasion.

According to court papers shared with Decrypt, Nigerian authorities alleged Binance, along with its regional head for Africa Nadeem Anjarwalla and its Head of Financial Crime Compliance Tigran Gambaryan, “carried on specialised business of other financial institution without valid licence (sic).”

They were also accused of manipulating the forex market, concealing the “origin of the proceeds of your unlawful activities,” and the “origin of a cumulative sum of $35,400,000”.

Binance and Nigeria

Steering Binance away from controversies and regulatory grey areas is a priority for the company’s new CEO Richard Teng. He succeeded Binance’s founder Changpeng Zhao as CEO, after Zhao resigned from the company last November as part of a settlement in a $4.3 billion money laundering case in the United States.

“Over the course of the past two years, Binance has systematically worked to address its past compliance issues through a series of significant efforts to recruit, hire, and retain the right personnel to strengthen Binance’s compliance program and culture,” Teng said days after succeeding Zhao in November 2023.

But the changes at the top of Binance don’t appear to have mollified Nigerian authorities.

In February, Nigeria’s central bank governor, Olayemi Cardoso, told journalists that $26 billion had passed through Binance Nigeria from unidentified sources in one year.

“We are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best,” Cardoso said.

At least $24.2 billion was received by illicit cryptocurrency addresses in 2023 globally, according to Chainalysis, a global cryptocurrency analysis firm. But it warned the figure could be higher.

In March, Bayo Onanuga, a spokesman for Nigeria’s President Bola Tinubu, insisted Binance operations were injurious to the country’s economy and blamed the crypto giant for weakening the local currency naira.

Binance denied any wrongdoing but announced the stoppage of all its naira-denominated services in March.

The country’s Federal Inland Revenue Services (FIRS) last month slapped four counts of tax evasion on the cryptocurrency exchange. The tax agency said the company helped its Nigerian users to evade taxes.

“One of the counts in the lawsuit pertains to Binance’s alleged failure to collect and remit various categories of taxes to the federation as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended,” FIRS said.

Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.

Binance was also accused of not paying value-added tax and company income tax, and not complying with tax return filing obligations.

Read full report: https://decrypt.co/225202/detained-execs-daring-escapes-how-binances-35-million-battle-with-nigeria-unfolded?amp=1