Global cryptocurrency exchange Binance has restricted 281 Nigerian accounts due to international money laundering laws, according to the company’s CEO.
According to a letter Changpeng Zhao sent to Nigerian customers on Jan. 29, the decision to restrict some personal accounts was made to ensure user safety, while more than a third of the accounts restricts were requested by international law enforcement agencies.
“Currently, we have resolved 79 cases and continue to work through others. All non-law enforcement-related cases will be resolved within two weeks,” Changpeng Zhao said.
Nigerians have used cryptocurrencies in spite of a central bank ban for business purposes, to protect their savings as the naira currency loses value, and to send money abroad because it is difficult to obtain U.S. dollars locally.
Blockchain giant Binance hopes Russia will spur growth in the region
Binance, the world’s largest cryptocurrency exchange, aims to expand in Russia and neighbouring states where it sees opportunities for new regulations that will boost its business, an executive said.
Russian politicians are urging the central bank to change its stance on cryptocurrency trading and mining because of concerns that it may cause financial instability. They say it should instead regulate a business which could draw in more tax revenues.
Vladimir Putin has asked the central bank to reach an agreement on how to handle cryptocurrency business, a subject that regulators, central banks, and governments around the globe have been grappling with.
“Our goal is to obtain a licence and conduct legal business where the regulation allows,” Binance Eastern European Director Gleb Kostarev told Reuters, adding that his company hoped for a progressive regulatory approach from Russia that could influence the approach taken by its neighbours.
Kostarev said Russia, where the central bank says the annual volume of cryptocurrency transactions stands at about $5 billion, was strategically important for Binance.
He described the central bank’s proposals to restrict trading as harsh, adding: “For now, we consider this as an invitation to dialogue with the regulator.”
Russia has opposed cryptocurrencies for years, saying they can be used to launder money or finance terrorism. It gave them legal status in 2020 but banned their use for payments.
According to Kostarev, Russia’s approach may influence how other countries in the region deal with cryptocurrencies.
“In Ukraine, Kazakhstan and Uzbekistan they are more loyal to cryptocurrencies and are taking steps towards liberalisation, rather than restriction,” he said. “But local regulators are taking these steps with an eye on Russia.”
According to Binance, the global hashrate, or the amount of computational power used by computers connected to the bitcoin network, was reduced by around 20% this month due to unrest in Kazakhstan and power outages.
Kostarev said the rate was now recovering.
A Reuters investigation last week showed Binance withheld information about its finances and corporate structure from regulators, even as it welcomed government oversight and lauded its anti-money laundering programme.
A Binance spokesperson responded saying the company backed “technologies and legislation that will set the crypto industry on the road to becoming a well-regulated, secure industry.”
During the investigation, Binance was also found to have violated its own compliance department by signing up customers from Russia and six other countries that were deemed to be of “extreme” money-laundering risk.
Binance said it had “one of the most sophisticated approaches” to enforcing anti-money laundering and counter-terrorism financing in the finance sector and internal risk ratings were adjusted according to a range of variables.
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