Binance, the world’s largest cryptocurrency exchange, has suspended 281 Nigerian users’ personal accounts, citing the need to comply with international money laundering rules, according to its CEO.
In a statement to Nigerian subscribers dated Jan. 29, Changpeng Zhao stated that the decision to block some personal accounts was made to ensure user safety, with more than a third of the accounts impacted being restricted at the request of international law enforcement.
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.
Despite a central bank ban, Nigerians have continued to use cryptocurrency for business, to preserve their savings as the naira currency depreciates, and to send payments abroad because it is difficult to obtain US dollars in the country.
Binance’s regulatory difficulties
According to a Reuters investigation, CZ “ignored” warnings about the exchange’s ineffective know-your-customer (KYC) checks, which are intended to be the first line of defense against money laundering and other illegal behavior.
Former Global Money Laundering Reporting Officer Karen Long said in a message received in 2019 that CZ wanted “no kyc.” Samuel Lim, Binance’s Chief Compliance Officer, also wrote, “Damn why touch fiat if dont wanna be compliant. So ironic LOL. Just say full crypto man. Jizzus,” in a text.
According to the Reuters research, Binance did not cooperate with German law authorities when they received 44 letters inquiring about transactions worth €2 million (approximately $2.2 million) that were suspected of involving stolen and laundered cash.
Previously, the crypto exchange drew the wrath of regulators all across the world.
Regulators in Holland and Japan have issued consumer alerts about the exchange. Binance has been denied a license to conduct business in the Cayman Islands and Italy, respectively.
Malaysian regulators have taken action against Binance for illegally operating in the country.
Binance withdrew an application for a license in Singapore after regulators placed the business on the city-Investor state’s Alert List.
Consumers in the United Kingdom have also been warned about the crypto exchange. They came back months later, saying that Binance Markets Limited, the exchange’s UK firm, was unable to be regulated because it failed to furnish the regulator with basic information.