Nigerian High Court Orders Binance Data Disclosure

The Nigerian High Court has ordered Binance Holdings to provide the Economic and Financial Crimes Commission (EFCC) with comprehensive information about Nigerian merchants on its platform, marking a significant legal milestone. Last year, the Nigerian Regulatory body also emphasized banning Binance.

The instruction was delivered by Justice Emeka Nwite in an interim decision on February 29, in response to an ex parte application that the EFCC had filed against Binance, as Sahara Reporters reported. One party may request relief without the other’s presence through an ex parte motion, which is distinguished by the defendant’s absence, depriving them of the chance to make a counterargument.

Allegations of Criminality and Regulatory Compliance

Attorney Ekele Iheanacho, speaking on behalf of the EFCC, said that Binance’s activities in Nigeria could have an illegal component. Sections 38 of the EFCC Act of 2004 and Section 15 of the Money Laundering (Prevention and Prohibition) Act of 2022 (as amended) require reporting suspicious transactions to authorities and impose fines for noncompliance. If these charges are confirmed, they may violate these laws.

Elaborating on the urgency of the Commission’s investigation, EFCC agent Hamma Bello provided an affidavit that referenced intelligence regarding possible money laundering and terrorism funding associated with the Binance platform. The foreign exchange market in Nigeria was negatively affected, and the value of the country’s currency was further depreciated, as a result of illicit operations such as price discovery, confirmation, and market manipulation that were exposed by the EFCC.

Calls for regulatory action were sparked by the EFCC’s emphasis on the negative implications of these activities on Nigeria’s economic stability. In response to these worries, the Commission asked Binance operators to remove the naira from its trading site.

The outcome of the legal proceedings will impact not just Binance’s regulatory compliance but also the regulatory environment that cryptocurrency exchanges in Nigeria are subject to on a larger scale.