President Bola Ahmed Tinubu of Nigeria. Michael Kapeler—Photo Alliance/Getty Images
When a country's currency is collapsing, it usually means that the market has decided that the country is not doing very well. In response, rulers can take certain steps to restore people's confidence in their government and economy. This could involve some mix of budget cuts, policy changes, and accountability measures. Or you can try something desperate, like finding a scapegoat and holding him hostage.
Unfortunately for Nigerians, Nigerian leaders chose Plan B. This came after the Nigerian government reacted to the free fall of the naira, blaming crypto exchanges including Binance for the collapse. The company dispatched two executives to try to quell the confusion. wall street journal They identified Nadeem Anjalwala, Binance's Africa regional manager, and Tigran Gambariyan, a former IRS special agent who leads financial crimes compliance. Upon their arrival, Nigerian authorities confiscated the men's mobile phones and passports and detained them in a secure house.
So why do they do that?of financial times An adviser to Nigeria's president says Binance executives have provided “a lot of information” suggesting Nigeria could impose a $10 billion fine in “retaliation” for “really disrupting” the economy. Stated. Officials said this should be seen as a starting point for negotiations, not the final price. ”
In other words, they took hostages to influence corporate innovation. This is a strategy that is becoming depressingly familiar in world affairs these days, putting Nigeria's rulers in the same league as Hamas and Russia's Vladimir Putin's mafia regime, and denying innocent reporter Evan Gershkovich his rightful name. He has been detained for nearly a year without any reason.
When it comes to Binance, no one would consider them a model corporate citizen. But under new CEO Richard Teng, the company has shown every sign of being willing to take compliance seriously, saying in a blog post that it has met repeatedly with Nigerian officials. As for the detained executives, I cannot speak for Mr. Anjalwala, but I do note that Mr. Gambarian is well-respected in law enforcement and cybersecurity circles and has cooperated in numerous criminal and terrorism investigations. can be proven. Both men have a young child who asks her mother every night when her father will come home.
There are also claims by Nigerian leaders that Binance, and cryptocurrencies in general, are usurping the role of the central bank in determining the value of the naira. It is true that many Nigerians are starting to turn to cryptocurrencies and that the growth of stablecoins is starting to challenge community currencies in many places. But such activity is a symptom, not a cause, no different from what is happening in the alleys of Buenos Aires, where Argentines have been buying black market US dollars for decades. In all these situations, local residents have lost confidence in the government's ability to protect the value of the national currency.
The final irony of all this is that even if this stunt works and Nigeria's rulers shake Binance with billions of dollars, it will do nothing to save the country from its currency crisis. Thing. If Nigeria’s leaders want to get to the root of the problem, they should stop blaming cryptocurrencies and instead look at Nigeria’s reputation as a hotbed of fraud and theft. That is why the country ranks 145th on Transparency International's Global Corruption Index. Taking hostages will only make the situation worse.
jeff john roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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