In a significant development concerning Nigeria’s financial landscape, the Economic and Financial Crimes Commission (EFCC) has taken decisive action against unauthorized foreign exchange transactions purportedly tied to Binance. A Federal High Court has granted authorization to block 1,146 bank accounts allegedly associated with these transactions, citing concerns over money laundering, terrorism financing, and unauthorized forex dealings.
The revelation of these actions emerged when affected individuals received notifications from their respective financial institutions, informing them of the freezing of their funds. The gravity of the situation became apparent as these individuals were urged to furnish valid court orders to release their frozen assets, underscoring the immediate impact on those affected.
EFCC Chairman Ola Olukoyede underscored the severity of the matter, revealing that the agency had previously intervened by blocking 300 accounts engaged in illegal peer-to-peer foreign exchange transactions. Notably, the chairman highlighted that over $15 billion had circulated through one of the platforms under scrutiny in the preceding year alone. He emphasized that the EFCC’s swift intervention played a pivotal role in averting a potential crash of the Naira within a week.
These measures by the EFCC are part of broader initiatives aimed at stabilizing the Naira and curbing volatility fueled by currency speculation. The crackdown comes in the wake of allegations of money laundering and tax evasion against two executives associated with Binance, signaling heightened scrutiny on cryptocurrency platforms by Nigerian authorities.
Further investigations into the matter revealed that a considerable number of the frozen accounts were held with some of Nigeria’s largest traditional banks, indicating the widespread nature of the issue. A report presented to Nigeria’s Central Bank in March highlighted certain clusters of retail traders manipulating FX prices through substantial unfulfilled orders for USDT, a prominent stablecoin.
Hakeem Bello, an EFCC operative, elaborated in a March affidavit on how these traders allegedly utilized the trading platform not only for transactions but also for price discovery and market manipulation. These activities, he asserted, had led to significant distortions in the market, contributing to the depreciation of the Naira against other currencies.