On July 5, in a Nigerian court, Binance faced allegations of operating illegally. Dr. Olubukola Akinwunmi from the Central Bank of Nigeria (CBN) testified that Binance lacked the necessary licenses and regulatory approval to perform banking services.

According to Dr. Akinwunmi, Binance’s deposit and withdrawal activities should only be carried out by banks and authorized financial institutions.

Nigerian Government Accuses Binance of Financial Misconduct

The Nigerian government has accused Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, of conspiring to conceal the origins of $35.4 million in funds linked to illegal activities in Nigeria.

In the ongoing trial, Dr. Olubukola Akinwunmi, testifying under EFCC counsel Ekele Iheanacho, stated that Binance’s website misled Nigerians by allowing naira transactions through a cash link. The platform advertised fee-free deposits and flat-fee withdrawals, services regulated by the Central Bank of Nigeria (CBN) and intended for licensed banks and financial institutions.

Dr. Akinwunmi also noted that Binance facilitated currency conversion from naira to dollars without CBN authorization, which is required for authorized dealers or Bureau de Change. Additionally, he pointed out that traders on Binance often use pseudonyms, violating laws that mandate the disclosure of true identities in financial transactions.

Dr. Olubukola Akinwunmi testified about Binance’s peer-to-peer transaction process, where buyers transfer naira to the sellers’ bank accounts and confirm transactions on the platform. Binance then releases the cryptocurrency or fiat currency. Dr. Akinwunmi argued that this service is regulated and that Binance was not authorized to perform such activities.

Following Dr. Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination. Justice Emeka Nwite also ordered the Nigerian Correctional Services to produce Tigran Gambaryan’s medical reports, with a warning of consequences for noncompliance.

This legal action is part of a broader crackdown on cryptocurrency activities in Nigeria. The National Security Adviser has classified cryptocurrency trading as a national security issue, leading the Central Bank of Nigeria (CBN) to direct fintech startups such as Opay, Moniepoint, Paga, and Palmpay to block and report accounts involved in cryptocurrency transactions.

In February, Binance disabled its peer-to-peer feature for Nigerian users due to increased government scrutiny. Additionally, during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), the SEC called for measures to remove the naira from peer-to-peer platforms to prevent market manipulation and safeguard Nigeria’s capital market integrity.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.





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