The Central Bank of Nigeria (CBN) has accused Binance, a prominent cryptocurrency exchange, of conducting banking activities without proper authorization. According to reports, Olubukola Akinwunmi, head of payment policy and regulation at the CBN, testified in the Federal High Court of Nigeria in Abuja, asserting that Binance’s handling of deposit and withdrawal transactions should be restricted to licensed banks and authorized financial institutions.
Akinwunmi, represented by Economic and Financial Crimes Commission counsel Ekele Iheanacho, alleged that Binance misled Nigerian users by promoting its platform for naira transactions via a cash link, offering fee-free deposits and fixed-fee withdrawals. These activities, regulated by the CBN, are reserved for licensed entities. Akinwunmi also claimed that Binance enabled currency conversions from naira to US dollars, a service requiring specific CBN authorization as either an authorized dealer or a Bureau de Change. Furthermore, he pointed out that Binance users often operated under pseudonyms, violating financial transaction disclosure laws.
The witness detailed Binance’s peer-to-peer transaction process, where one party transfers naira to another party’s bank account, confirmed via the platform, leading to the release of cryptocurrency or fiat currency by Binance. Akinwunmi argued that this service falls under regulated activities unauthorized for Binance.
Following Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination, with Judge Emeka Nwite also instructing the Nigerian Correctional Services to provide medical reports for Tigran Gambaryan, warning of consequences for non-compliance.
The crackdown on cryptocurrency activities follows the National Security Adviser’s categorization of cryptocurrency trading as a national security concern. In response, the CBN directed fintech startups Opay, Moniepoint, Paga, and Palmpay to block and report accounts engaged in cryptocurrency transactions.
In February, Binance discontinued its peer-to-peer feature for Nigerian users amidst increased government scrutiny. Additionally, during a virtual meeting with Nigeria’s Blockchain Industry Coordinating Committee, the SEC advocated for measures to remove the naira from P2P platforms to combat market manipulation and safeguard Nigeria’s capital market integrity.