Nigerian and other investors in crypto tokens may feel more pain in the coming weeks as U.S. Department of Justice prosecutors are reportedly close to concluding a long-running criminal investigation into the world’s largest cryptocurrency exchange Binance.
The investigation began in 2018 and is focused on Binance’s compliance with U.S. anti-money laundering laws and sanctions, Reuters reported on Monday.
The stakes are high for the deeply troubled crypto sector. If the investigation goes against Binance, it could add to negative sentiment arround crypto, that intensified with the recent collapse of rival exchange FTX.
Binance’s defense attorneys at U.S. law firm Gibson Dunn in recent meetings with Justice Department officials, argued that a criminal prosecution would wreak havoc on a crypto market already in a prolonged downturn, according to the Reuters report.
Launched by Changpeng Zhao in Shanghai in 2017, Binance now dominates the crypto industry. The exchange processed trades worth around $1.6 trillion in October, about half of the entire crypto market’s trading volume.
That sum dwarfed its former challenger FTX, which handled $230 billion in trades that month, according to data site CryptoCompare.
The Binance criminal investigation will add more pressure to Nigerian crypto investors (one of the largest on the African continent), following the suspension of Crypto withdrawals by exchange AAX, on November 12, which is sparking panic among those in the country exposed to the exchange.