According to a report by Nigerian media Premium Times, the country’s central bank (CBN) accused the exchange Binance of conducting banking and financial institution business without a license and regulatory approval, including legal currency exchange and P2P market services.
Binance is accused of illegally operating banking services
The report pointed out that Olubukola Akinwunmi, deputy governor of the Central Bank of Nigeria (CBN), testified in court last Friday, claiming that Binance’s deposit and withdrawal transactions and other financial services should only be provided by banks and authorized financial institutions.
Unauthorized currency exchange
First, the Economic and Financial Crimes Commission (EFCC) and CBN Head of Payments and Regulatory Policy Ekele Iheanacho stated that the relevant authorities have not issued any license to Binance allowing it to operate in the country:
We usually monitor the activity of local payment providers and at this time noticed that Binance provides a platform that allows users to trade virtual assets.
He claimed that many local people use the payment system to transfer funds, make payments, and exchange the local legal currency Naira (NGN) with US dollars:
However, firstly, these traders usually use false identities to trade, and secondly, Binance is not authorized by the CBN to conduct this business.
It added, “Only the CBN and authorized dealers can perform legal currency exchange services, and the transaction itself violates the law that requires disclosure of true identity in financial transactions.”
In this regard, when Binance faced regulatory disputes in February this year, it immediately announced that it would withdraw from its legal currency exchange services in the country.
P2P Market
In addition, Akinwunmi also mentioned Binance’s P2P market, emphasizing that the company has no right to conduct related business:
The buyer transfers naira to the seller's bank account and confirms the transaction on the platform, allowing the two to trade various countries' fiat currencies or cryptocurrencies directly through negotiation between the two parties.
Likewise, Binance shut down its P2P buying and selling functionality for local users earlier this year.
The court is currently on recess until July 16, when cross-examination will resume.
Nigeria moves to block cryptocurrencies
Previously, the Nigerian authorities had accused Binance of currency manipulation, tax arrears and involvement in money laundering, demanding tens of billions of dollars in compensation and detaining two of its executives.
(Nigeria plans to block cryptocurrency exchanges: serious manipulation of the local legal currency exchange rate, and the naira plummeted 28% within a day)
As part of a major move to regulate the encryption industry, the country's authorities have also required many local banks and financial technology companies, including OPay, Kuda Bank and PalmPay, to stop interacting with cryptocurrency-related businesses, otherwise they will be sanctioned.
Moniepoint, the largest local commercial payment platform, also notified its users in May this year, calling on them not to use accounts that have conducted cryptocurrency transactions in its app to avoid getting into trouble:
In compliance with CBN regulations, we will close any accounts dealing in cryptocurrencies and share their details with the authorities.
In the face of Nigeria's strict regulatory attitude, the International Monetary Fund (IMF) has previously recommended that the country implement anti-money laundering mechanisms for the crypto industry and further open up development in the face of the current economic risks it faces, which will help help the local economy. growing up.
(The IMF recommends that the Nigerian authorities regulate crypto exchanges and implement anti-money laundering instead of strictly banning them)
This article, the Central Bank of Nigeria accuses Binance of illegally operating banking services such as fiat currency exchange and P2P market, first appeared on Chain News ABMedia.
