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CBN protects consumers over $26bn illicit flows through Binance —Cardoso

*Dr. Olayemi Cardoso, Governor of the Central Bank Nigeria, discloses certain unclear activities have confirmed illegal financial flows through some cryptocurrency platforms like Binance, and the Bank is poised to protect consumers of financial products and services in the economy

Isola Moses | ConsumerConnect

Against the bakdrop.of alleged illicit financial flows by certain cryptocurrency platforms, Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has revealed that $26 billion passed through Binance Nigeria in a year.

The Governor of CBN said this during the Bank’s first Monetary Policy Committee’s (MPC) meeting Tuesday, February 27, 2024, in Abuja, FCT, said the illicit funds were from voodoo sources and users the Bankers’ Bank could not identify.

On the activities of cryptocurrency platforms like Binance Nigeria, Dr. Cardoso said the CBN has a responsibility to protect Nigerian consumers of financial products and services, and has been collaborating with other arms of the government to confirm some of their fears.

“They are concerned that certain practices go on that indicate illicit flows going through a number of these entities and suspicious flows at best.

“In the last one year alone, $26 billion have passed through Binance Nigeria from sources and users we cannot adequately identify,” stated the CBN Chief.

Sequel to allegations of illicit financial flows through such cryptocurrency platforms, the Nigerian Government had apprehended some individuals in the crypto space for full investigation.

Cardoso confirmed to MPC members, there is an ongoing collaboration among some agencies, including the Nigeria Police, Economic and Financial Crimes Commission (EFCC), and the Office of the National Security Adviser (ONSA), for action.

According to Cardoso, the banking sector regulator would share more information regarding the collaboration in due course.

He, nonetheless, said: “Suffice to say that we are determined to do everything it takes to ensure that we take charge of our market and not allow others to manipulate it.

“We will not accept it and will do everything possible to prevent any infraction.”

Earlier, the Nigerian Government had directed the telecommunications firms to restrict access to the Web sites of cryptocurrency firms in the West African country.

Authorities noted the restriction on crypto Web sites aims to minimise currency speculation activities in Nigeria.

Crypto platform not for currency pricing, replies Binance

In an e-mail confirming the restriction, Binance Nigeria said: “We are aware that some users are experiencing issues accessing, along with other platforms in the industry.

“Only users attempting to access the Web site are impacted, although the app is currently available.”

But, Binance has since clarified that its platform is not for “currency pricing”.

The firm stated: “We continue to actively engage with regulators, policymakers, and other relevant stakeholders to foster an open, transparent dialogue about managing the evolving landscape of cryptocurrency and financial markets.”

It was gathered that Nigeria remains one of the largest peer-to-peer crypto markets in the world. Between July 2022 and June 2023, crypto transactions in the country reached $56.7 billion, according to Chainalysis.

The Blockchain technology research firm noted: “Perhaps even more notable is that Nigeria’s crypto economy continues to grow despite market turmoil. In fact, Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied.”

The company further contended that Nigerians were adopting crypto to preserve the value of their savings against rising inflation and debt.

ConsumerConnect reports the Nigeria’s inflation rate surged from 21.82 percent as of January 2023 to 29.90 percent last month, said the CBN.

In the country’s renewed clampdown on crypto activities came amid a recent CBN guideline meant to govern the digital asset space.

It is noted the CBN, December 2023, had listed February 2021 ban on crypto transactions in the financial ecosystem, with a view to fine-tuning the government approach to crypto operations in Nigeria.

Experts disagree with clampdown on crypto platforms

Meanwhile, industry experts believe that the recent moves against crypto activities in the country will not curb the current slide in the value of the Naira in the long run.

Chimezie Chuta, Founder and Coordinator of Blockchain Nigeria User Group, told BusinessDay, that “the government is focusing on the wrong thing in their effort to tackle the naira’s issue.”

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