The Central Bank of Nigeria (CBN) has leveled charges against the cryptocurrency exchange Binance, claiming it has been conducting banking operations without the necessary licenses.
Olubukola Akinwunmi, who leads the CBN’s payment policy and regulation division, presented evidence in front of Judge Emeka Nwite at the Federal High Court in Abuja. Akinwunmi argued that the deposit and withdrawal services offered by Binance are legally restricted to banks and other financial entities with the proper authorization.
**Allegations of Unauthorized Currency Exchange**
Binance, along with its executives Tigran Gambaryan and Nadeem Anjarwalla, stands accused by the Nigerian authorities of attempting to conceal the illicit origins of financial gains totaling $35.4 million within the country.
During the proceedings, Akinwunmi, represented by Ekele Iheanacho, attorney for the Economic and Financial Crimes Commission, claimed that Binance’s website falsely enticed Nigerians to conduct transactions in the local currency, naira, through a direct cash link. The site advertised no-fee deposits and fixed-fee withdrawals, which are activities overseen by the CBN and typically reserved for licensed institutions.
Akinwunmi further alleged that Binance enabled the exchange of naira for US dollars without the CBN’s approval, a transaction that requires the status of an authorized dealer or a Bureau de Change. He pointed out that Binance users often operate under pseudonyms, a practice that violates the legal requirement for financial transactions to disclose the participants’ true identities.
**Peer-to-Peer Transactions Without Authorization**
The testimony also covered Binance’s peer-to-peer (P2P) transaction mechanism, where buyers transfer naira to sellers’ bank accounts and confirm the transaction on Binance’s platform, leading to the release of cryptocurrency or fiat currency. According to Akinwunmi, this constitutes a regulated activity for which Binance lacks authorization.
**Subsequent Developments:**
Following Akinwunmi’s statements, the court session was postponed until July 16 for the defense’s cross-examination. Additionally, Judge Nwite mandated the Nigerian Correctional Services to submit medical reports for Tigran Gambaryan, emphasizing the importance of compliance.
This legal action is part of a broader crackdown on cryptocurrency dealings after the National Security Adviser labeled such trading as a threat to national security. The CBN has instructed fintech firms like Opay, Moniepoint, Paga, and Palmpay to halt and report any accounts involved in cryptocurrency transactions.
In response to regulatory pressures, Binance turned off its P2P functionality for Nigerian users in February. In a related development, the Securities and Exchange Commission (SEC), during an online conference with Nigeria’s Blockchain Industry Coordinating Committee, advocated for the removal of the naira from P2P platforms to prevent market manipulation and safeguard the integrity of the nation’s financial market.
**In Other News:**
The magazine “Crypto-Sec” reports that a phishing scammer targeted Hedera users, while an address poisoner managed to secure $70,000.