In a Nigerian court on Friday, July 5, the Central Bank of Nigeria (CBN) highlighted alleged illegal operations by Binance, with a Central Bank official testifying about the exchange’s lack of necessary licenses and regulatory approval.
The Central Bank of Nigeria (CBN) has criticized Binance, the world-renowned cryptocurrency exchange, for providing banking services without proper authorization.
According to local media, Dr. Olubukola Akinwunmi, Head of Payment Policy and Regulation at the CBN, testified before Justice Emeka Nwite of the Federal High Court, Abuja, asserting that Binance’s deposit and withdrawal transactions should be reserved for banks and authorized financial institutions.
Unlicensed Currency Conversion Allegations
The Nigerian government has accused Binance and its executives, Tigran Gambaryan and the fleeing Nadeem Anjarwalla, of conspiring to obscure the origins of $35,400,000 in financial proceeds from illegal activities in Nigeria.
During the trial, Dr. Akinwunmi, led by EFCC counsel Ekele Iheanacho, stated that Binance’s website misled Nigerians into using its platform for naira transactions via a cash link. The platform promoted fee-free deposits and flat-fee withdrawals, activities regulated by the CBN and reserved for licensed banks and financial institutions.
Dr. Akinwunmi explained that Binance also facilitated currency conversion from naira to dollars, which requires CBN authorization as an authorized dealer or a Bureau de Change. He highlighted that traders on Binance often use pseudonyms, contravening laws requiring the disclosure of true identities in financial transactions.
Unauthorized P2P Transactions
The witness detailed the peer-to-peer transaction process on Binance, where the buying party transfers naira to the selling party’s bank account and confirms the transaction on the platform, prompting Binance to release the cryptocurrency or fiat currency. Dr. Akinwunmi argued that this service is a regulated activity that Binance was not authorized to perform.
Summary Review: The Central Bank of Nigeria’s allegations against Binance highlight the ongoing regulatory challenges faced by cryptocurrency exchanges operating in countries with stringent financial regulations. The case underscores the importance of regulatory compliance for financial institutions and the potential legal repercussions of failing to obtain necessary authorizations.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
