Witness in Nigerian trial against Binance accuses platform of contravening Central Bank rules
Akinwumi’s accusations were part of his testimony in the lawsuit brought by the Economic and Financial Crimes Commission (EFCC) against Binance and its executive, Tigran Gambaryan.
Akinwumi is the second witness in the ongoing trial, where Binance and its executive are accused of alleged money laundering to the tune of $35.4 million.
Akinwumi testified that Binance enables Nigerian users to use pseudonyms to conduct transactions on its platform. This is in direct contravention of the CBN’s rules, which requires parties to disclose their true identities in financial transactions.
He added that the Binance peer-to-peer (P2P) platform, which helps users transact directly, involves the transfer of the Nigerian fiat currency, Naira.
Akinwumi said:
“So the Binance platform facilitates all the processes or P2P transactions as I have just enumerated, either using a Nigerian bank account already stored by users on the Binance platform or the naira wallet account provided by the Binance platform.”
Detailing how the P2P transactions take place via the Binance platform, Akinwumi explained that such transactions were against the CBN’s rules. It is worth noting, however, that Binance discontinued its P2P feature for Nigerians following government scrutiny in February.
The witness also pointed out that Binance allows Nigerians to deposit and withdraw Naira from the platform using a ‘cash link.’ However, depositing and withdrawing of Naira is a regulated activity under the purview of the CBN. Binance, the witness reminded, is not licensed by the CBN as a payment service provider.
Akinwumi is set to be cross-examined on July 16, when the trial resumes.
Nigeria’s crackdown on crypto service providers began after the country’s National Security Adviser (NSA) labeled crypto trading as a national security threat. The NSA’s classification marked a significant shift in the country’s stance towards crypto — the CBN lifted a two-year ban on crypto transactions just last December.
Last month, 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 the new regime. The SEC also warned of enforcement actions in case of non-compliance.
