The Central Bank of Nigeria has sued Binance for unauthorized transactions
The Central Bank of Nigeria (CBN) has accused crypto exchange Binance of conducting banking services without proper authorization.
According to local media, CBN Head of Payments Policy and Regulation, Olubukola Akinwunmi testified before Justice Emeka Nwite of the Federal High Court of Nigeria in Abuja that Binance deposits and withdrawals should be reserved for banks and authorized financial institutions.
Unauthorized currency conversion charges
The Nigerian government has accused Binance and its executives, Tigran Gambarian and Nadeem Anjarwala, of conspiring to obscure the source of $35.4 million in illegal proceeds in Nigeria.
During the trial, Akinwunmi, who was led by Economic and Financial Crimes Commission counsel Ekele Iheanacho, allegedly misled Nigerians to use the Binces website for transactions in naira using a cash link. The platform offers fee-free deposits and title withdrawals, CBN-mandated activities and is designed for licensed banks and financial institutions.
Akinwunmi Bins also facilitates currency conversion from Naira to United States Dollars, which requires CBN approval as an Authorized Dealer or Bureau D Exchange. It highlighted that traders on Binance often use pseudonyms, which violates laws requiring disclosure of real identities in financial transactions.
Unauthorized P2P transactions
The witness detailed the process of a peer-to-peer transaction on Binance, where the governing party transfers naira to the seller's bank account and confirms the transaction on the platform, prompting Binance to issue a cryptocurrency or fiat currency. Akinwunmi argued that the service was a regulated activity that Binance was not authorized to perform.
Related: Nigeria's crypto reputation will prevail despite recent problems – Exchange exec
After Akinwunmi's testimony, the court adjourned to July 16 for defense cross-examination. Nwit also ordered the Nigerian Correctional Service to produce Tigran Gambria's medical reports, warning of consequences for non-compliance.
This crackdown on cryptocurrency activities follows the National Security Adviser's designation of cryptocurrency trading as a matter of national security. The CBN ordered fintech start-ups Opai, Moneypoint, Paga and Palmpay to suspend and report accounts engaged in cryptocurrency trading.
In February, Binance disabled its peer-to-peer feature for Nigerian users due to government regulation. Additionally, during a virtual meeting with the Nigerian Blockchain Industry Steering Committee, the SEC called for measures to delist the naira from P2P platforms to curb market manipulation and protect the integrity of Nigeria's capital market.
Magazine: Crypto-Sec: Phisher Follows Hedera Users, Address Poison Gets $70K
