Nigerian authorities have detained two Binance Holdings Ltd. executives, days after the central bank governor said that the nation is losing out on taxes from unregistered crypto exchanges.
The two were intercepted by national security officers after arriving in the country on the grounds that Binance operates illegally in Nigeria, according to people familiar with the mater.
They have not yet been charged but could face claims of currency manipulation, tax evasion and illegal operations, said the people, who declined to be identified because they lack permission to discuss the matter publicly.
“It is not necessarily arrest per say,” Zakari Mijinyawa, a spokesman for the National Security Adviser said in a phone interview, without being more specific. “Meetings and discussions are ongoing. It’s a national security issue and an interagency process is on.”
Nigeria’s moves against Binance follow the platform’s agreement in a Seattle court last week to pay $4.3 billion in a plea deal that levies one of the largest criminal penalties in US history. Binance has been facing a regulatory hurdles in other countries. India moved against offshore exchanges after local competitors argued that fresh taxes unveiled in 2022 created an unfair playing field.
Binance officials didn’t respond to emails and text messages. The Financial Times first reported the detention.
The two had been invited to Nigeria to meet officials after the government last week blocked access to cryptocurrency platforms amid a crackdown on foreign-exchange speculators in a nation that’s facing dollar scarcity.
The naira has fallen around 70% against the dollar, fanning a cost-of-living crisis that has sparked protests in cities around the West African nation.
The people familiar with the situation said that Nigeria was losing an important source of tax revenue because Binance is not registered in Nigeria.
Nigerian central bank Governor Olayemi Cardoso named the company during a press conference on Tuesday after announcing a record interest rate increase to defend the naira.
Decrying “illicit flows” he said that $26 billion has passed through Binance in Nigeria “from sources and users who we cannot adequately identify.”
Nigeria has had a frosty relationship with crytocurrency operators, which were banned until late last year when the central bank asked lenders to open accounts for operators.
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