CurrencyWorld reports:
This is a significant development in Nigeria’s cryptocurrency market, as the CBN accuses global cryptocurrency exchange Binance of serious charges. On Friday, July 5, a CBN official appeared in court, stating that Binance has been providing banking services in the country without legal permission and approval. This revelation came out when the applicant testified at the Federal High Court of Nigeria in Abuja, presided over by Judge Emeka Nwite.
Dr. Olubukola Akinwunmi, Director of Payment Systems and Regulations at CBN, provided compelling testimony accusing Binance of operating without proper authorization. According to Dr. Akinwunmi, the deposit and withdrawal transactions conducted by Binance can only be legally carried out by licensed banks and financial institutions.
This testimony is part of a broader legal challenge where Binance and its executives, Tigran Gambaryan and the absconded Nadeem Anjarwalla, face charges of concealing the origins of $35,400,000 in illicit funds in Nigeria.
The Nigerian government argues that Binance’s website misleads users to transact in Naira through a platform that facilitates free deposits and fixed-fee withdrawals. Dr. Akinwunmi emphasized that these activities fall under CBN’s regulatory scope and are reserved for licensed entities.
He also pointed out that Binance facilitates the conversion of currency from Naira to USD, an action that requires explicit CBN authorization, usually granted to authorized dealers or Bureaux de Change.
Furthermore, Dr. Akinwunmi outlined the procedures of P2P trading on Binance, which make it very challenging for users to complete the process independently. In these transactions, the buyer transfers funds to the seller’s bank account and confirms the transaction through the platform for Binance to release the corresponding cryptocurrency or fiat currency to the seller in Naira. According to Dr. Akinwunmi, this practice constitutes regulated financial services that Binance is not authorized to offer.
The court adjourned the hearing to July 16, giving the defense time for cross-examination. Judge Nwite also ordered the Nigerian Correctional Service to provide a medical report for Tigran Gambaryan, warning of severe consequences for non-compliance.
This legal action is part of Nigeria’s broader crackdown on cryptocurrency activities. The National Security Advisor has classified cryptocurrency trading as a national security issue, leading CBN to instruct fintech startups like Opay, Moniepoint, Paga, and Palmpay to block and report accounts engaged in cryptocurrency transactions. In response to the increasing scrutiny, Binance disabled the P2P feature for Nigerian users in February.
Moreover, in a virtual meeting with the Nigeria Blockchain Industry Coordination Committee (BICCoN), the US Securities and Exchange Commission called for measures to delist Naira from P2P platforms to prevent market manipulation and protect the integrity of the Nigerian capital market.
As this case unfolds, it reveals the challenges and legal hurdles cryptocurrency exchanges face while operating in different countries. The outcome of this legal battle could determine the fate of cryptocurrency operations in Nigeria and worldwide
