New problems arise for Binance as lawmakers ask CEO to appear regarding accusations of terrorism financing and tax evasion
Binance, the popular global cryptocurrency exchange, faces fresh challenges as the House of Representatives Committee on Financial Crimes has requested CEO Richard Teng of Binance Holding Limited to address allegations of involvement in terrorism financing, money laundering, and tax evasion.
The company has been under scrutiny lately, with the federal government imposing a hefty $10 billion fine for alleged illicit activities within the country.
More recently, tensions with the Nigerian government have escalated, with the Central Bank Governor, Olayemi Cardoso, revealing that around $26 billion in illicit crypto-related flows had been processed through Binance.
Also, a presidential spokesperson, Bayo Onanuga recently said that Binance will destroy the Nigerian economy by arbitrarily fixing foreign exchange rate if the platform is not checked.
Binance has also been flagged in several countries including UK, Japan, Canada and Singapore for flouting regulatory framework and causing disruptions in the currency market.
In the US alone, the platform was made to pay $4.3 billion for violations of anti-money laundering and sanctions laws leading to the resignation of Changpeng Zhao as the Chief Executive Officer of the platform.
In June 2023, the Securities and Exchange Commission (SEC) said the operation of Binance Nigeria Limited, a subsidiary of Binance, was illegal.
Earlier, the Nigerian government had detained two Binance Holdings Ltd. executives, days after the Central Bank of Nigeria’s Governor, Olayemi Cardoso disclosed that the nation is losing out on taxes from unregistered crypto exchanges platforms.
The two were intercepted by national security officers after arriving in the country on the grounds that Binance operates illegally in Nigeria.
However, the chairman of the committee, Ginger Onwusibe, at a panel in Abuja on Friday, March 1, 2024, issued a seven-day ultimatum to the management of the cryptocurrency trading platform to appear before the committee on or before Monday, March 4.
The lawmaker decried the refusal of the Binance CEO to appear after a series of invitations to brief the committee relating to the total disregard for extant laws governing business and financial operations in the country.
Onwusibe further warned that the committee would be forced to invoke the constitutional powers vested in the committee to take appropriate measures if the platform’s management fails to heed the summons.
He said: “We also have to protect and defend the country’s finances, especially now that the country is nose-diving into recession. The allegations of terrorism financing, money laundering, and tax evasion, among others levelled against Binance are damning enough.
“At this material time, we need all the tax dollars and block the leaks and channels to finance terror.”
The committee had summoned the Managing Director of Binance in December 2023 but the cryptocurrency trading platform’s official failed to appear before the lawmakers.
The Central Bank of Nigeria (CBN) had accused Binance of involvement in money laundering and tax evasion, among others.
