The revelation by the Central Bank of Nigeria (CBN) governor Yemi Cardoso on Tuesday that $26 billion suspicious transactions passed through the crypto app Binance Nigeria in the last one year may have exposed the weaknesses in the system.
“In the case of Binance, in the last one year, 26 billion dollars has passed through Binance Nigeria from sources and users who we cannot adequately identify,” he told reporters after his first MPC meeting since assuming office as the CBN governor.
More worrisome, according to some analysts, familiar with the issues at stake, but pleaded for anonymity was the fact that the revelation is coming a week after Binance blocked Nigerian accounts from its services.
Binance action was in response to a circular issued by the CBN directing its telecom companies to block access to cryptocurrency-related websites, including prominent platforms like Binance, OctaFX, and Coinbase.
Although, metrobusinessnews.com (MBN) gathered that the FG had blocked Binance, OctaFX, other Crypto Firms following continued plunging of the Naira, neither the government nor CBN had openly admitted that such action has been taken.
Infact, Binance, a leading digital assets platform, has been under scrutiny by Nigerian authorities since September 2023 when the Securities and Exchange Commission (SEC), twice within the year, disclaimed its operations, labeling them as ‘illegal’,.
But since then it has been operating unhindered and without any consequences, neither from CBN, SEC nor other security agencies.
”SEC has not taken any recent action against Binance or any crypto firm aside the disclaimer action against Binance twice in 2023,» says a source.
Nigeria has been battling economic woes in recent months, but Cardoso said his team is not responsible for that.
“I laugh at that question but it’s not a laughing matter and I think it is very important for Nigerians to understand that the Central Bank Governor — I and my team — are not responsible for the woes that we have today; we are part of the solution,” the former Lagos State Commissioner for Economic Planning and Budget said.
But some stakeholders are worried that despite the deluge of anticorruption and security agencies, the issues of illicit flows passing through institutions or illegal transactions, with and among some institutions such as banks or any other platforms have not been closely monitored by the nation’s regulatory agencies like SEC and CBN, among others.
This is despite workable synergy that exists between the two Federal Government entities.
Underscoring the development, Cardoso further said:
“We are concerned that certain practices go on that indicate illicit flows, going through a number of these entities and suspicious flows. In the case of Binance, in the last year, $26 billion has passed through Binance Nigeria from sources and users who we cannot adequately identify,”.
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Cardoso said, “We have a responsibility to protect Nigerians and it is with that responsibility in view that you have the Central Bank collaborate with other agency of government. The collaboration with the Securities and Exchange Commission is not just by virtue of the fact that the DG of SEC is a member of the MPC but also the fact that they have a very important role to play with respect to protecting the interest of the numerous.stakeholders.»
“Granted that these issues have been on ground before the new CBN Governor came on board, but what happened and possibly happening to the occupants of some of these FG entities? looking the other side while many havocs were being wrecked on the economy?, says an analyst.
Expressing determination for effective collaboration with other agencies, Cardoso added:
“In that regard, I am pleased to note that the collaboration we have had has been able to identify some of the affairs. We 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 case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify. There is a lot that is going on now as a result of the collaboration between the different agencies which includes the Economic and Financial Crimes Commission, the Police and the Office of the National Security Adviser.”
Last year December, the apex bank reversed the ban on crypto platforms imposed by former CBN Governor, Godwin Emefiele in 2021. Emefiele made the decision over allegation of money laundering and terrorism risks they posed.