Crypto hub Nigeria reportedly demands $10B from Binance after its currency plunges
When Lagos gives you lemons… Binance halted transactions using Nigerian currency after the country’s officials reportedly demanded $10B in compensation from the world’s largest crypto exchange and arrested two of its visiting execs. Nigeria, Africa’s largest economy and a major crypto hub, accused Binance of price-fixing practices that it said plunged its currency: since last summer, the naira has lost 70% of its value. The gov’t also argues that Binance acts as a gateway for bad actors to launder money and finance terror.
Stress test: Nigeria wants an audience with Binance CEO Richard Teng, who was hastily promoted to the role after founder Changpeng Zhao pleaded guilty to money-laundering charges in the US.
Pressure: Nigeria recently suspended Coinbase, Kraken, and other crypto exchanges as the gov’t tries to control the naira’s slide and the cost-of-living crisis it’s exacerbating.
Seeking digital solutions… to IRL issues. About a fifth of the world’s unbanked population is in sub-Saharan Africa, where 350M people don’t use banks. People in the region have turned to digital currencies as a way to store and send money. One in five South Africans and Nigerians owns digital assets (compared to ~10% of people globally) and more bitcoin is traded in Nigeria than in any other region. The OG crypto is seen as a less volatile alternative to local currencies experiencing rapid inflation — like Nigeria’s naira and * spins globe * Argentina’s peso.
Crypto’s a two-sided coin… Nigerian officials have said crypto trading is accelerating the hyperinflation of the country’s currency. To shore up their economies, several African countries have banned crypto, including Nigeria from 2021 to 2023. At the same time, some countries with inflation struggles are all in on digital assets: El Salvador scrapped its local currency in favor of the US dollar and bitcoin, which are both accepted as legal tender there, and Argentina’s new president, Javier Milei, is vocally pro-crypto.