On Friday, Olubukola Akinwumi, deputy director of the Central Bank of Nigeria (CBN), accused Binance of conducting transactions meant for authorized banks and financial institutions. Local media reported this accusation.
Testimony and Accusations
Akinwumi’s accusations were part of his testimony in the lawsuit filed by the Economic and Financial Crimes Commission (EFCC) against Binance and its executive, Tigran Gambaryan. This lawsuit involves allegations of money laundering amounting to $35.4 million. Akinwumi is the second witness in this ongoing trial.
Allegations of Money Laundering
Akinwumi testified that Binance enables Nigerian users to use pseudonyms to conduct transactions on its platform. This action violates CBN’s rules, which mandate that parties disclose their true identities in financial transactions. Additionally, he highlighted that the Binance peer-to-peer (P2P) platform facilitates the transfer of the Nigerian currency, Naira.
Violations and Platform Mechanics
According to Akinwumi, the Binance platform allows users to conduct transactions using a Nigerian bank account already stored on the platform or the Naira wallet account provided by Binance. He emphasized that these P2P transactions violate CBN’s rules. However, after government scrutiny in February, Binance discontinued its P2P feature for Nigerians.
Regulated Activities and Licensing
Akinwumi also pointed out that Binance allows Nigerians to deposit and withdraw Naira using a ‘cash link,’ an activity regulated by the CBN. He reminded that the CBN does not license Binance as a payment service provider.
Upcoming Cross-Examination
Akinwumi is set to be cross-examined on July 16 when the trial resumes.
Broader Context of Nigeria’s Crypto Crackdown
Nigeria crackdown on crypto service providers began after the National Security Adviser (NSA) labeled crypto trading as a national security threat. This classification marked a significant shift in the country’s stance towards crypto, with the CBN lifting a two-year ban on crypto transactions last December. In June, Nigeria’s Securities and Exchange Commission (SEC) issued a 30-day window for crypto exchanges and digital asset traders to re-register their businesses under a new regime, warning of enforcement actions in case of non-compliance.
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