According to Nigerian media outlet Premium Times, the country’s central bank (CBN) has accused cryptocurrency exchange Binance of conducting banking and financial institution operations without permission and regulatory approval, including fiat currency exchange and P2P marketplace services.
Title: Binance Accused of Illegally Operating Banking Business
Unauthorized Currency Exchange
P2P Marketplace
Nigeria Takes Big Action to Block Cryptocurrency
The report states that Olubukola Akinwunmi, the Deputy Governor of the Central Bank of Nigeria (CBN), testified in court last Friday, claiming that Binance’s deposit and withdrawal transactions and other financial services should only be provided by banks and authorized financial institutions.
Unauthorized Currency Exchange
Firstly, the Economic and Financial Crimes Commission (EFCC) and Ekele Iheanacho, the Director of Payments and Regulatory Policies at the CBN, stated that no license has been issued to Binance to operate in the country:
“We usually monitor the activities of local payment providers and at this time, we noticed that Binance provided a platform for users to trade virtual assets.”
He claimed that many local individuals use payment systems for transfers, payments, and currency exchange between the local currency, Naira (NGN), and the US dollar. However, these traders usually use false identities, and Binance is not authorized by the CBN to conduct such business.
He further added, “Only the CBN and authorized dealers are allowed to provide fiat currency exchange services, and the transactions themselves violate the law requiring disclosure of true identities in financial transactions.”
In response, Binance also announced the closure of its fiat currency exchange services in the country in February this year amid regulatory controversies.
P2P Marketplace
Additionally, Akinwunmi mentioned Binance’s P2P marketplace and emphasized that the company has no authority to conduct related operations:
“Buyers transfer Naira to sellers’ bank accounts and confirm transactions on the platform, enabling direct negotiation between the two parties to trade national currencies or cryptocurrencies.”
Similarly, Binance had already shut down its P2P trading functionality for local users earlier this year.
The court will adjourn until July 16, when further cross-examinations will take place.
Nigeria’s Big Action to Block Cryptocurrency
Previously, Nigerian authorities accused Binance of manipulating exchange rates, tax evasion, and involvement in money laundering, resulting in a demand for billions of dollars in compensation and the detention of two of its executives.
( Nigeria Plans to Ban Cryptocurrency Exchanges: Severe Manipulation of Local Fiat Exchange Rates Causes Dramatic 28% Drop in Naira )
As one of the means of regulating the cryptocurrency industry, the country’s authorities have also instructed several local banks and fintech companies, including OPay, Kuda Bank, and PalmPay, to cease interactions with cryptocurrency-related businesses or face sanctions.
The largest commercial payment platform in Nigeria, Moniepoint, also notified its users in May not to use accounts that have been involved in cryptocurrency transactions in its app to avoid trouble:
“According to CBN regulations, we will close any accounts engaged in cryptocurrency transactions and share their details with the authorities.”
Facing Nigeria’s strict regulatory approach, the International Monetary Fund (IMF) previously advised the country to implement anti-money laundering mechanisms for the cryptocurrency industry and further open up development, which would help the local economy grow.
( IMF Advises Nigerian Authorities to Regulate Cryptocurrency Exchanges and Implement Anti-Money Laundering Measures Instead of Strict Bans )
P2P
Cryptocurrency Regulation
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