Nigerian authorities have obtained a court order collecting user data, putting Binance in a potentially dangerous legal predicament.
Nigerian authorities have reportedly cracked down on cryptocurrency exchanges, including Binance, in an effort to stop the naira’s precipitous decline versus the dollar over the last few weeks.
Authorities are pressing for information on Nigerian users of the exchange in light of claims that the site facilitates a number of illegal activities. This is a crucial development in the ongoing crackdown. There has been a marked improvement in the government’s data search since the last court hearing.
On Monday, March 18, local news agencies reported that Binance was ordered by a Nigerian court to send over detailed customer data pertaining to Nigeria to the Economic and Financial Crimes Commission (EFCC).
The anti-graft agency’s ex-parte motion formed the basis for the order’s grant. In an ex-parte application, one side asks the court to issue an order without first hearing from the other on the grounds of extreme need or extraordinary circumstances.
A tip-off indicated that criminals were engaging in “money laundering and terrorist funding” on Binance, and the country’s anti-graft agency hoped the temporary ban would aid in their probe. In response to this tip-off, the agency said it has discovered illegal actors using wash trading methods on Binance’s p2p marketplace to manipulate the naira price. In response to these allegations, the exchange has only recently disabled its naira p2p marketplace.
According to TEMPLARS Associate Albright Emmanuel, who spoke with DailyCoin, in civil disputes, interim orders on ex-parte petitions are normally only effective for seven to fourteen days, or until a regular hearing can be convened. Emmanuel did point out that there might be serious legal ramifications for exchanges like Binance if they do not reply positively to the ruling or request permission to appeal within 14 days.
The attorney informed DailyCoin that if Binance disobeys the ex-parte ruling, the exchange might face contempt of court charges and other punishments like fines or even imprisonment for its personnel.
The Nigerian authorities have previously held two top Binance executives for more than three weeks in the midst of the continuing disaster.
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