[Nigeria’s central bank accuses Binance of conducting unauthorized transactions]
The Central Bank of Nigeria (CBN) has accused cryptocurrency exchange Binance of providing banking services without authorization.
Olubukola Akinwunmi, CBN’s head of payments policy and regulations, testified before Nigeria’s Federal High Court, claiming that deposit and withdrawal transactions on Binance should be reserved for banks and authorized financial institutions. The Nigerian government has accused Binance and its top executives, Tigran Gambaryan and Nadeem Anjarwalla, of conspiring to conceal the source of $35.4 million in financial proceeds from illegal activities.
Akinwunmi, led by Economic and Financial Crimes Commission (EFCC) lawyer Ekele Iheanacho, said Binance’s website misled Nigerians into using its platform to trade in Naira. The platform promotes fee-free deposits and withdrawals, which are regulated by the CBN and reserved for licensed banks and financial institutions.
Akinwunmi claimed that Binance facilitated the currency conversion of naira to US dollars, which requires authorization from the CBN as an authorized dealer or bureau of exchange. He noted that traders on Binance often use pseudonyms, violating laws that require the disclosure of true identities in financial transactions.
Akinwunmi detailed the peer-to-peer transaction process on Binance, in which the buyer transfers naira to the seller’s bank account and the transaction is confirmed on the platform, prompting Binance to release the cryptocurrency or fiat currency. He argued that the service was a regulated activity that Binance was not authorized to conduct.
The court adjourned the trial until July 16 to allow for defense cross-examination. Judge Nwite also ordered the Nigeria Corrective Services to provide Tigran Gambaryan’s medical report and warned of the consequences of non-compliance.
The crackdown on cryptocurrency activity comes after the national security adviser classified cryptocurrency trading as a national security issue. The CBN has directed fintech startups Opay, Moniepoint, Paga and Palmpay to block and report accounts engaging in cryptocurrency transactions.
