Tag Archives: must

Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC

Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC

A Nigerian federal high court has ordered Binance Holdings Limited to provide the Economic and Financial Crime Commission (EFCC) with comprehensive data and trade history of all Nigerians trading on its platform.

Justice Emeka Nwite gave the interim ruling on February 29, 2024, following an ex-parte motion raised by Ekele Iheanancho, the EFCC’s legal attorney.

Data to Unravel Money Laundering by Nigerians on Binance

According to local news outlet Punch, the court interim order was granted to allow the EFCC to investigate alleged money laundering violations and terrorism financing activities processed by Nigerians on Binance.

 

This means the anti-financial crime agency has the legal backing to request and access Nigerian traders on the exchange and conduct investigations.

Nonetheless, it is worth noting that Justice Nwite’s ruling stemmed from an ex-parte motion filed by the EFCC, which was based on specific sections of the Nigerian constitution.

This includes Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the EFCC Act, 2004. Other are Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and the inherent powers of the court.

The highlighted legal provisions mandated the report of suspicious transactions to the Nigerian authorities and penalties for non-compliance.

The ex-parte motion filed by the EFCC claimed that Binance trading activities in the Nigeria region feature obvious elements of criminality.

An Affidavit was also filed by Hamma Bello, an operative of the anti-graft agency and member of its Special Investigation Team (SIT) within the Office of the National Security Adviser (ONSA). This was in support of the motion brought forward by the EFCC.

According to local news media, the filed document stated that the EFCC received intelligence on money laundering and terror financing on Binance. This led to the commencement of a thorough investigation by the EFCC.

Nigeria Trading Volume On Binance Capped at $21.6 Billion for 2023: The Looming Danger

Bello further stated that Binance’s request and compliance to release detailed data on Nigerian traders on Binance is of the utmost public interest and national security.

According to him, “The team uncovered users who have been using the platform for price discovery, confirmation, and market manipulation, which has caused tremendous distortions in the market, resulting in the Naira losing its value against other currencies.”

 

Bello reiterated that the damage caused by the Binance was clearly explained to the representatives of the exchange.

It could be recalled that the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, accused Binance of facilitating $26 billion of illicit funds in Nigeria in 2023.

Meanwhile, the crypto exchange has proceeded to release trading volume data by Nigerians for 2023, which is capped at $21.6 billion.

 

This was closely followed by a request to delist the Naira on March 5 to mitigate depreciation.

As the case unfolds, crypto enthusiasts, investors, and experts in Nigeria believe the exchange won’t succumb to Nigeria’s court demands.

This is because an act of meeting the demands of the court would go against the ethos of cryptocurrency and decentralization.

 

Dialogue or Sanction: Will Crypto Win?

Case observers believed the potential exit of Binance from Nigeria looms and could affect the growth of cryptocurrency and blockchain technology in the country.

 

According to Anndy Lian, a blockchain expert, Nigeria had the world’s highest proportion of crypto users.

Between June 2022 and June 2023, it had a 9% year-over-year growth of $56.7 billion in crypto transactions.

However, these figures could drop if the world’s largest crypto exchange by trading volume restricts trading operations in Nigeria.

While the Nigerian government and the EFCC believe this will help the Naira gain more value, citizens have shared concerns about basic blame games and lost priorities.

If a dialogue between both parties does not happen soon, Nigerian traders may have to look for other alternatives for their trading needs.

Source:https://www.economywatch.com/news/nigerian-court-rules-binance-must-provide-resident-traders-data-to-efcc

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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Experts Roundtable: What DEXs Must Do Better for Adoption

Experts Roundtable: What DEXs Must Do Better for Adoption

Binance, one of the most prominent cryptocurrency exchanges in the decentralized finance (DeFi) industry, was recently hit with one of the biggest fines in crypto history. As part of its plea deal, the company is set to pay a $4.3 billion fine, and its co-founder and former CEO, Changpeng Zhao (CZ), had to step down from his position.

Following the Binance debacle, Bittrex Global, another crypto exchange, has decided to stop its operation in the United States.

The murky Proof of Reserves and ensuing lawsuits and regulatory uncertainty of CEXs have led many people to leap to decentralized exchanges (DEXs).

So we ask the experts: What can DEXs learn from their centralized cousins in 2024?

Binance Plea Deal Highlights Importance of DEXs in Crypto Space

DEXs manage to solve several problems either caused or suffered by CEX centralized exchanges (CEXs) like Binance and FTX.

A large part of that is removing the centralized “moneypot” and authority, David Bleznak, the managing partner at Draper Goren Blockchain (DGB), told Technopedia.

“In an ideal world, there would be no central entity to incur penalties or fines if the DEX is actually decentralized. However, in practice there are usually parties involved in getting the DEX off the ground or even further operating some critical infrastructure (see Uniswap Labs).

 

These entities can follow the law and continue to forgo hosting front-ends that facilitate trading of fraudulent tokens or other prohibited activity.”

Anndy Lian, the author of NFT: From Zero to Hero, added that the recent Binance news highlighted how important decentralized exchanges are for cryptocurrency.

“Binance is facing legal challenges from various regulators around the world, who accuse the platform of violating financial laws and facilitating illicit activities.

 

“This has raised concerns among users about the security, privacy, and accessibility of their funds and data on centralized platforms. DEXs, on the other hand, offer a more decentralized and trustless alternative, where users can trade directly with each other without intermediaries or censorship.”

Moreover, DEXs allow users to have access to a much more comprehensive range of crypto assets and services like derivatives, lending, and non-fungible tokens (NFTs) that may not be available or compliant on centralized platforms.

DEX Regulatory Compliance – A Must

Regulatory compliance is one of the most crucial aspects DEXs must remember to prevent a recurrence of events similar to those surrounding Binance, Lian told Technopedia.

Adhering to regulatory standards ensures legal scrutiny and oversight, fostering trust among users, exchanges, and authorities.

Lian stressed:

“While DEXs may not have a central authority or entity that can be held accountable, they still need to respect the laws and rules of the land, especially when it comes to anti-money laundering, counter-terrorism financing, consumer protection, and taxation.”

Unfortunately, the recent events surrounding Binance have forced an array of negative headlines to circulate in the cryptocurrency industry; however, the fact that the Binance case has been settled provides some stability and certainty within the space, Ben Weiss, the CEO and co-founder at CoinFlip, noted.

“The issues facing Binance have shown that where a company is based won’t impact the basics of sanctions screening and AML/KYC.

 

“I believe decentralized exchanges are going to also be expected to perform the basics of AML/KYC and sanctions screening, and just because an exchange is decentralized doesn’t mean governments won’t expect their laws and regulations to be followed.”

Lian added that DEXs could use the Binance case as a case study to strengthen their operations by implementing appropriate measures and mechanisms to ensure AML/KYC compliance, geo-blocking, governance, and auditing. Moreover, DEXs can also collaborate and communicate with regulators and policymakers to ensure nothing goes unnoticed.

DGB’s Bleznak said:

“It has taken a long time for the true (crypto) believers to accept that code is not law… law is law, and we have not just a responsibility but an obligation and civic duty to uphold the rule of law.

 

It is important, no matter how decentralized we make these systems, to keep this perspective. Further, we should all act morally outside of the rule of law and choose not to cut corners or let our greed get the best of our decision-making.”

Education and Staying Up-to-Date Are Key

According to Lian, one of the key challenges faced by DEXs is the lack of awareness and understanding among users about the risks and benefits associated with decentralized trading, which is why educating users is another key aspect DEXs must consider.

“Decentralized trading can offer users more freedom, choice, and control over their assets and transactions, but it also requires more responsibility, knowledge, and skill.

 

“Users need to be aware of the potential pitfalls and dangers of decentralized trading, such as volatility, liquidity, slippage, scams, and bugs. Users also need to be familiar with the technical aspects and mechanisms of decentralized trading, such as wallets, keys, gas fees, swaps, and pool.”

However, this can be easily achieved through  “comprehensive guides, interactive tutorials, and community engagement initiatives,” DGB’s Bleznak explained.

Another initiative DEXs could consider is partnering with educational platforms and influencers in the digital assets industry, which could broaden their reach.

However, because DEXs leverage the power of smart contracts, staying up to date with the latest technological developments is another key aspect DEXs should keep in mind in the new year, CoinFlip’s Weiss added.

“The biggest challenges for DEXs are related to the user experience, such as complicated interfaces and thin liquidity.  That said, DEXs are innovating rapidly such as by using layer 2 solutions to increase scalability and capacity.”

In addition, DEXs can also leverage emerging technologies like Layer 2 scaling solutions, sharding, and cross-chain interoperability to address some of the current challenges they may face, like high transaction fees, network congestion, and limited asset diversity, Bleznak said.

“Implementing these technologies can enhance the user experience by reducing transaction costs and improving transaction speeds.”

DEXs Have Big Potential to Democratize Finance

CoinFlip’s Weiss noted that DEXs “have a lot of potential to democratize finance” because they eliminate the intermediaries present in traditional finance and are especially important in countries that have historically had little banking and financial infrastructure.

“DEXs are harder to navigate than CEXs from both a user learning curve and user interface perspective.

 

“That said, because the wallets are non-custodial, DEXs can be a more secure option than a CEX but only if the user has the sophistication level necessary to navigate a platform that will more likely have a complicated interface and require knowledge of crypto.”

DEXs Can Strike a Balance Between User Privacy and Security

Moreover, DEXs can balance user privacy and security by leveraging advanced cryptographic techniques like zero-knowledge proofs, which enhance privacy while maintaining security.

User privacy is one of the main advantages of DEXs as users can trade anonymously without disclosing their personal information or financial data, Lian added.

“However, user privacy can also pose risks and challenges, such as fraud, theft, hacking, and abuse. Therefore, DEXs need to implement robust security measures to protect users and their funds, such as encryption, multi-signature, smart contracts, and insurance.

 

“DEXs can strike a balance between maintaining user privacy and implementing robust security measures by adopting a risk-based approach, where they apply different levels of verification and protection depending on the type, size, and frequency of transactions.”

The Bottom Line

In navigating the challenges posed by the recent Binance lawsuit, decentralized exchanges must prioritize regulatory compliance, emphasizing adherence to legal standards that will build trust among users, the exchanges themselves, and regulating bodies.

Educational initiatives are crucial to raising awareness about the risks and benefits of decentralized trading, requiring DEXs to provide comprehensive guides and engage with the community.

Meanwhile, staying abreast of technological advancements, leveraging emerging solutions, and finding a balance between user privacy and security will be key in unlocking the vast potential of DEXs in 2024.

 

 

 

Source: https://www.techopedia.com/decentralized-exchanges-adoption-challenges-expert-panel

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Stablecoins Are Here to Stay – And Regulators Must Get On Board

Stablecoins Are Here to Stay – And Regulators Must Get On Board

The recent collapse of the TerraUSD algorithmic stablecoin has put the popular crypto asset in the spotlight. And its repercussions are only just starting to be felt, from talk of government regulation from US Treasury Secretary Janet Yellen, to Tether temporarily losing its USDT 1:1 peg to the dollar, to an all-time low of US$0.95, and with investors withdrawing more than US$10 billion in the past two weeks.

Kathleen Breitman, a co-creator of the Tezos blockchain, speaking to CNBC on the topic said: “As much as I relish seeing things that don’t make sense fail, there’s always a tinge of like, ‘Are people going to extrapolate from this that everything that’s a stablecoin is unsound?’”

At the same time, a statement from the G7 on May 20 warned that “no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards.”

Despite recent events stablecoins remain a necessary and popular part of the crypto ecosystem.

Despite recent events stablecoins remain a necessary and popular part of the crypto ecosystem. In a October 2021 report from DBS – Singapore’s largest bank – recognized that “Stablecoins have gained momentum” while also noting concerns about stablecoins to withstand high volatility. In fact, Singapore is no stranger to stablecoin innovation, with the launch of the XSGD pegged to the Singaporean dollar in 2020 by StraitsX, with a market cap of almost US$200 million and records over US$1 million in traded volume on a daily basis it’s the world’s largest non-USD fiat-backed stablecoin. I’m also impressed by the Jarvis Network, which has its own set of stablecoins collateralized with USDC, including SGD in late 2021.

These innovations support Singapore’s leading role as a regional crypto hub, with government and startups working in partnership.

Even after the Terra crash, stablecoins still have a total market cap of over US$160 billion, according to CoinMarketCap, with market leader Tether currently worth around US$73 billion, having surged from just US$4.1 billion at the start of 2020.

That said, Tether has not escaped the current slump unscathed, having lost US$11 billion in vale since its US$84.2 billion on May 11. In a statement on Monday May 23 Tether sounded an understanding note, welcome in the current situation, acknowledging that following its loss of peg that “it’s natural that investors might have questions about what stops USDT from facing a similar fate.” But confirmed it had US$70 billion of collateral. I agree the strength of Tether, compared to most traditional banks, has been its ability to process withdrawal of 10% of its assets in a few days.

Check the fine print

Despite these “collateralized assurances,” the data shows crypto whales leaving Tether for USDC. Not surprisingly these whales regard USDC, as the safer option, bearing in mind USDC reports its assets monthly. However, those same whales might want to check the small print.

Circle claims that each USDC is backed by a reserve dollar, and other “approved investments”, these are not detailed. Indeed, the wording on the Circle website changed from the “backed by US dollars” to “backed by fully reserved assets” by June 2021. The third most popular stablecoin, BUSD, created in 2019 as a collaboration with Binance and Paxos, which grew in market cap of around US$1B at the start of 2021, to over US$14.6 billion at the end of 2021, and is now up to over US$18 billion is I believe another winner from the Terra crash, due in large part due to the security involved with the token. As both regulated by the New York State Department of Financial Services, and publicly audited very month, its likely to benefit from the demand for secure stablecoins going forward.

I’m also heartened by the positive post-Brexit approach to stablecoins from the UK government, which clearly recognizes that stablecoins are here to stay, and we need all governments and regulators to get behind that fact.

As an industry we also need to recognise that algorithmic stablecoins are a “different kettle of fish.”

But as an industry we also need to recognise that algorithmic stablecoins are a “different kettle of fish.” I concur with Chris Burniske’s assessment that while it’s unwise to think they’ll never be a workable algorithmic stablecoin, if such an asset needs to either go up or stay stable to work, then it’s not going to survive the crypto market.

Let’s also not forget in the push to get mainstream adoption of crypto that that also raises the risk of contagion to the wider economy. The problem is if the folks who got hit hardest, the retail investors, who bet on LunaUSD because they were told it was “safe”, decide to pull back from other assets.

That said, a balance needs to be struck in terms of protecting investors, the risk in investing in altcoins is different from that with stablecoins. I’m in agreement that regulation needs to happen, but a balance needs to be struck, in protecting investors, and which also allows for rapid innovation which is key to the success of the crypto industry.

 

Original Source: https://blockhead.co/2022/05/29/stablecoins-are-here-to-stay-and-regulators-must-get-on-board/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j