The Central Bank of Nigeria (CBN) has accused crypto exchange Binance of conducting banking operations without proper authorization. Olubukola Akinwunmi, head of payment policy and regulation at the CBN, testified before Judge Emeka Nwite of the Federal High Court of Nigeria in Abuja, asserting that Binance’s activities involving deposit and withdrawal transactions should be limited to banks and authorized financial institutions.
Akinwunmi, represented by Economic and Financial Crimes Commission counsel Ekele Iheanacho, alleged that Binance misled Nigerians through its website by facilitating naira transactions using a cash link, promoting fee-free deposits and flat-fee withdrawals. These activities, regulated by the CBN, are reserved for licensed financial entities. Additionally, Akinwunmi claimed that Binance enabled currency conversion from naira to US dollars, a process requiring CBN authorization as an authorized dealer or a Bureau de Change. He noted that traders often used aliases, in violation of financial transaction identity disclosure laws.
Regarding peer-to-peer (P2P) transactions on Binance, Akinwunmi explained that buyers transferred naira to sellers’ bank accounts, confirming transactions on the platform to release cryptocurrency or fiat currency. He argued that this service, a regulated activity, was not authorized for Binance.
Following Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination. Judge Nwite also instructed the Nigerian Correctional Services to provide medical reports for Tigran Gambaryan, warning of consequences for non-compliance.
This regulatory action against cryptocurrency activities aligns with the National Security Adviser’s classification of cryptocurrency trading as a national security concern. The CBN has directed fintech startups Opay, Moniepoint, Paga, and Palmpay to block and report accounts involved in cryptocurrency transactions.
Earlier this year, Binance suspended its peer-to-peer feature for Nigerian users due to increased government scrutiny. Furthermore, during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria, the Securities and Exchange Commission (SEC) proposed measures to remove the naira from P2P platforms to prevent market manipulation and safeguard Nigeria’s capital market integrity.