While most cryptocurrency exchanges are integrating into international markets, Binance is constantly facing a regulatory storm. France, the Netherlands, Belgium, and many other countries have long been suing the exchange for providing illegal services.
The list is constantly growing, as the exchange regularly continued to operate illegally despite the ban. However, the most high-profile situation that has recently occurred with Binance regulation happened in Nigeria. The conflict has been going on for almost a month and the situation continues to escalate. Why the exchange is so disagreeable to Nigeria and what has been happening over the past month is the topic of today’s article.
Barriers to Binance in Nigeria
Nigeria, which is one of the largest cryptocurrency user countries, is a major market for crypto exchange, especially due to its p2p services.
“The commission again reiterates that the activities of Binance, [Binance website] and any such other platform through which the company solicits investors are neither registered nor regulated by the commission, and its operations in Nigeria are therefore illegal,” the SEC said.
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Since then, the exchange has been under the scrutiny of Nigerian regulators. They launched an investigation in which they accused the exchange of money laundering, noting that in 2023 alone, more than $28 billion in unidentified funds passed through the cryptocurrency. The exchange was also accused of artificially inflating the Nigerian Naira, which caused a large-scale collapse against the US dollar.
In an attempt to establish communication with the regulators, Binance sent two of its employees, who were immediately detained by the NSA (National Security Advisor) office. After that, the exchange made a statement about the suspension of services in the country and the removal of all existing pairs from the NGN.
“Users are encouraged to withdraw NGN, trade their NGN assets, or convert NGN into crypto before the discontinuation of these NGN services,” the statement says.
Conflict Escalates
According to the Premium Times, one of the detained Binance executives, Nadeem Anjarwalla, recently escaped from custody. Anjarwalla is suspected of using his Kenyan passport to fly out of Nigeria on an unidentified Middle Eastern airliner. According to the report, he disappeared after leaving a government “guest house” on the pretext of attending prayers at a nearby mosque in connection with the ongoing Ramadan fast.
The NSA office said that after receiving information about the incident, they took immediate steps to apprehend the suspect, working with relevant security agencies, the MDA, and the international community. The statement also noted that the intelligence agencies are working with Interpol to obtain an international arrest warrant for the suspect.
“We urge the Nigerian public and the international community to provide whatever information they have that can assist law enforcement agencies to apprehend the suspect.” the statement says.
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After that, the Nigerian government brought additional charges against Binance. The Federal Inland Revenue Service of Nigeria has accused Binance and several of its executives of tax evasion. They allege that the exchange is not complying with the rules by evading value-added tax, income tax, failure to file a tax return, and complicity in aiding and abetting clients to evade taxes through its platform. The lawsuit also alleges that Binance failed to register with the Internal Revenue Service for tax purposes and violated the country’s applicable tax laws.
It would seem that the numerous accusations should have stopped the exchange from engaging in illegal activities, but the opposite is happening.
Philippines To Block Binance Exchange
On March 25, the Philippine Securities and Exchange Commission (SEC) announced that it would block access to the cryptocurrency exchange Binance. The regulators filed a formal request with the National Telecommunications Authority on March 12 asking for help in “blocking the website and other web pages used by Binance, which was found to offer an investment and trading platform without the required license.”
According to the SEC of the Philippines, Binance “actively uses social media advertising campaigns to attract Filipinos to participate in investment and trading activities on its platforms.”
Back in November, the Philippine Securities and Exchange Commission warned about the exchange’s operation without a license.
“The SEC has identified the aforementioned platform and concluded that the public’s continued access to these websites/apps poses a threat to the security of the funds of investing Filipinos,” SEC Chairperson Emilio B. Aquino said in the letter-request addressed to the NTC.
According to the SEC, the ban will take effect within three months to give investors time to withdraw their assets from the exchange.
Binance’s Reputation Is Under The Question
The cryptocurrency exchange’s reputation has long been tarnished by a big black mark due to its involvement in several illegal activities. Litigation with the US Securities and Exchange Commission, asset laundering, cooperation with malicious organizations, user data leaks, and much more have reduced the credibility of Binance.
Moreover, the exchange deliberately continued to work with Russians for two years. Several crypto exchanges, such as Bithumb, WhiteBIT, Korbit, and more, have blocked Russian users’ accounts since the start of the full-scale invasion, but Binance decided otherwise.
At the time, Binance’s current CEO Changpeng Zhao said: “We don’t think it’s right for companies or platforms to unilaterally decide to freeze users’ assets. There are ordinary Russian citizens living in London and New York”
Almost two years were needed for Binance to leave the Russian market. Announcing this in September, they transferred their rights to the newly created CommEx exchange. At the time, many cryptocurrency users called this exchange the “Russian version” of Binance.
However, after six months of operation, CommEx announced its closure. The question is whether we can expect a new replacement for CommEx from Binance soon.
Summary
The situation around Binance is getting worse, as the exchange is constantly facing regulatory pressure from several countries. Emphasizing that the exchange prioritizes popularization over security and compliance. This approach will further contribute to even more blocking and legal charges. It also increases the need for stricter regulation and control over cryptocurrency exchanges in the future.
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Vladislav Hryniv
I'm an aspiring digital journalist. I have worked with web3 companies for 3 years as a copywriter. Prefer to write articles on AI, Web3, blockchain technology and cryptocurrency on Medium and Substack.