Binance is in hot water in Nigeria in the wake of its settlement with the US Department of Justice (DOJ). According to a local news report, Nigeria’s House of Representatives Commission on Financial Crimes issued an ultimatum to Binance CEO Richard Teng on Friday.
Ginger Onwusibe, the chairman of the committee, has asked Teng to appear before the committee on March 4. The summons was issued due to his alleged involvement in financial crimes, including money laundering and terrorist financing.
Onwusibe warned that Teng’s failure to respond to the subpoena would force the commission to invoke its constitutional powers and take appropriate action.
In its US plea deal, which received court approval last week, Binance pleaded guilty to money laundering and terrorist financing. The exchange also agreed to pay a historic $4.3 billion fine and conduct oversight as part of the settlement.
Binance has not cooperated with the Nigerian commission
Shortly after Binance’s US plea deal was announced, the committee, in a December 12 letter, first asked Binance’s chief executive to attend a hearing on December 18. Binance was asked to inform the committee about Binance’s disregard for Nigerian laws.
The Nigerian committee issued the ultimatum after Binance had rejected the invitation to address the committee several times in the past.
Onwusibe said:
“The Constitution of the Federal Republic of Nigeria has given us the power to protect Nigerians from financial crimes, especially by foreign companies… The allegations of terrorist financing, money laundering and tax evasion, among others, against Binance are damning enough.”
Onwusibe said the commission is determined to fight financial crime and “block the leaks and channels of terror financing,” and “no amount of distraction and manipulation can stop us.”
Now that Nigeria is struggling with a recession, the committee is also trying to collect as much tax money as possible.
According to Onwusibe, Binance serves more than 10 million Nigerians on its platform. However, the exchange does not pay taxes in the country. Binance also has no physical presence in Nigeria for users to file complaints, Onwusibe said, adding:
“The era of exploitation is over and all those responsible must be held accountable.”
Binance’s problems in Nigeria are escalating
Last week, the country’s telecom regulator, the Nigerian Communications Commission (NCC), ordered telecom companies to block access to websites of foreign crypto exchanges, including Binance, Coinbase and Kraken.
According to a report by DLNews, on February 26, Nigeria’s Ministry of State Security arrested two Binance executives and seized their passports in connection with the investigation into Binance.
A day later, Olayemi Cardoso, governor of the Central Bank of Nigeria, said Binance Nigeria has witnessed “suspicious fund flows” in 2023. He stated:
“In the case of Binance, $26 billion has passed through Binance Nigeria in the past year alone, from sources and users we cannot adequately identify.”
On Friday, the BBC reported that the Nigerian government has ordered Binance to pay $10 billion in compensation. The report also noted that the government believes Binance and its executives have manipulated exchange rates through currency speculation and rate fixing.
In a report the same day by the Peoples Gazette Nigeria, a Binance spokesperson said that while the exchange was in discussions with the government to “resolve issues,” it had not been notified of a $10 billion fine. In the same report, Special Advisor Bayo Onanuga said his comments to the BBC were misinterpreted and that he never said the government had set the amount of the fine or that Binance was aware of it.
