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CBN alleges Binance conducted illegal banking services in Nigeria
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CBN alleges Binance conducted illegal banking services in Nigeria

Jul 7, 2024

On July 5, the Central Bank of Nigeria (CBN) raised serious allegations against cryptocurrency exchange Binance, claiming it has been conducting banking services without necessary approvals. 

Olubukola Akinwunmi, head of payment policy and regulation at the CBN, testified in the Federal High Court in Abuja, emphasizing that Binance’s deposit and withdrawal operations should be exclusive to licensed banks and financial institutions.

The Nigerian government accuses Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, of hiding the origins of $35.4 million linked to illegal activities. 

Akinwunmi, under questioning from Economic and Financial Crimes Commission counsel Ekele Iheanacho, indicated that Binance’s website misled Nigerians into conducting naira transactions. 

The platform promoted fee-free deposits and low-cost withdrawals, services that are strictly regulated by the CBN.

Akinwunmi highlighted that Binance facilitated currency exchanges from naira to US dollars without CBN authorization, which is required for such transactions. 

The use of pseudonyms by traders on Binance was also noted as a violation of financial laws mandating the disclosure of true identities.

The court was informed about Binance’s peer-to-peer (P2P) transaction process, where buyers transfer naira directly to sellers’ bank accounts. 

Akinwunmi argued that these activities are regulated and that Binance was not authorized to offer such services. 

Following Akinwunmi’s testimony, the court adjourned the case until July 16 for the defence’s cross-examination. 

The judge also mandated the production of medical reports for Tigran Gambaryan, warning of repercussions for noncompliance.

This case is part of a broader crackdown on cryptocurrency in Nigeria. 

The CBN has instructed fintech companies like Opay and Moniepoint to block and report accounts involved in cryptocurrency transactions. 

In February, Binance disabled its P2P feature for Nigerian users due to increased government scrutiny. 

The Securities and Exchange Commission (SEC) has also called for measures to delist the naira from P2P platforms to prevent market manipulation and safeguard the country’s financial system.

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