The Nigerian government has accused Binance, one of the world's largest cryptocurrency exchanges, of operating illegally in the country. In a court hearing on July 5, Dr. Olubukola Akinwunmi from the Central Bank of Nigeria (CBN) testified that Binance lacked the necessary licenses and regulatory approval to perform banking services, including deposit and withdrawal activities.
The Nigerian government has also 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. The platform allegedly allowed naira transactions through a cash link, advertised fee-free deposits and flat-fee withdrawals, and facilitated currency conversion from naira to dollars without CBN authorization.
Dr. Akinwunmi noted that Binance's peer-to-peer transaction process, where buyers transfer naira to sellers' bank accounts and confirm transactions on the platform, is a regulated service that requires authorization. The platform's failure to disclose true identities in financial transactions also violates Nigerian laws.
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 CBN to direct fintech startups to block and report accounts involved in cryptocurrency transactions. Binance disabled its peer-to-peer feature for Nigerian users in February due to increased government scrutiny.
The Securities and Exchange Commission (SEC) has also called for measures to remove the naira from peer-to-peer platforms to prevent market manipulation and safeguard Nigeria's capital market integrity. The court adjourned until July 16 for the defense's cross-examination, with a warning to produce Tigran Gambaryan's medical reports.
This development highlights the ongoing regulatory challenges facing cryptocurrency exchanges in Nigeria and the need for compliance with local laws and regulations. Stay tuned for further updates on this developing story!