Binance in Big Trouble in Nigeria, Illegal Crypto Trading?

An official from the Central Bank of Nigeria (CBN) has said that Binance has been operating illegally in Nigeria on multiple occasions. This comes amid an ongoing legal case against the well-known crypto firm in Nigeria.

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Major accusations against Binance

In April 2024, the Nigeria Economic Financial Crime Commission (EFCC) launched a case against Binance and its director Tigray Gambaryan. They are accused of tax evasion, currency trading and money laundering of approximately $34.4 million.

After adjournment in June, the legal proceedings resumed last Friday. The prosecution introduced Dr. Olubukola Akinwunmi as a witness. He is the head of the Payment Policy and Regulation Department at the CBN.

According to the local newspaper Nairametrics Akinwunmi said Binance violated Nigerian law by offering deposit and withdrawal services. These services are only allowed to be performed by banks and registered financial institutions under the supervision of the CBN.

Currency trading also under fire

Akinwunmi also criticized Binance’s peer-to-peer (P2P) feature, which allows users to exchange Nigerian Naira for US dollars. According to him, Binance needs a license from the central bank as an “authorized issuer” or “exchange house” to offer these services in Nigeria. He also found that the anonymous transactions violate Nigerian laws.

It is important to note that Binance has a mandatory identification procedure (know-your-customer) for all users of its P2P service and other trading features. In May, Binance and other exchanges shut down their Naira P2P services after allegations of currency trading causing the rapid depreciation of the Naira.

Binance in waiting room

Justice Emeka Nwite of the Federal High Court in Abuja, after the testimony, adjourned the case until July 16. This will give the defendants’ lawyers time for cross-examination.

How the case will proceed is still unclear. But it is certain that Binance is under heavy scrutiny in Nigeria. This could have major implications for how crypto exchanges operate in the country in the future.

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