The Central Bank of Nigeria (CBN) has leveled serious accusations against cryptocurrency exchange Binance, claiming it conducted unauthorized banking operations in the country. In a recent court session, Olubukola Akinwunmi, head of payment policy at the CBN, testified that Binance’s deposit and withdrawal services should be restricted to licensed banks and financial institutions.
The Nigerian government has accused Binance and its executives, Tigran Gambaryan and Nadeem Anjarwalla, of disguising the origins of $35.4 million linked to illegal activities in Nigeria. Akinwunmi asserted that Binance’s website misled Nigerians by promoting fee-free deposits and flat-fee withdrawals, activities that the CBN reserves for authorized financial entities. Additionally, he claimed that Binance facilitated currency conversions from naira to US dollars without the necessary CBN authorization, a role designated for licensed dealers or Bureau de Change. He pointed out that many traders on Binance use pseudonyms, contravening financial laws that require the use of true identities.
Akinwunmi explained Binance’s peer-to-peer transaction process, where buyers transfer naira to sellers’ bank accounts and then confirm the transaction on the platform, prompting Binance to release the cryptocurrency or fiat currency. He argued that such activities are regulated and that Binance was not authorized to conduct them.
After Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination. Judge Emeka Nwite also ordered the Nigerian Correctional Services to provide medical reports for Tigran Gambaryan, warning of repercussions for noncompliance.
This action against Binance is part of a wider crackdown on cryptocurrency activities in Nigeria, following the National Security Adviser’s declaration of cryptocurrency trading as a national security threat. The CBN has instructed fintech companies like Opay, Moniepoint, Paga, and Palmpay to block and report accounts involved in cryptocurrency transactions. In response to regulatory pressure, Binance disabled its peer-to-peer feature for Nigerian users in February. The Nigerian Securities and Exchange Commission (SEC) has also called for the delisting of the naira from P2P platforms to prevent market manipulation and protect the integrity of the country’s capital market.
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