Central Bank of Nigeria (CBN) has told the Federal High Court of Nigeria in Abuja, that Binance, crypto exchange performed banking services without proper authorization.

Olubukola Akinwunmi, head of payment policy and regulation at the CBN, testified before Justice Emeka Nwite of the Federal High Court of Nigeria, asserting that Binance’s deposit and withdrawal transactions should be reserved for banks and authorized financial institutions.

The federal government has accused Binance and Tigran Gambaryan and Nadeem Anjarwalla, its executives of conspiring to obscure the origins of $35.4 million in financial proceeds from illegal activities in Nigeria.

During the trial, Akinwunmi, led by Ekele Iheanacho, counsel for the Economic and Financial Crimes Commission (EFCC), 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.

Akinwunmi claimed that Binance also facilitated currency conversion from naira to United States dollars, which requires CBN authorization as an authorized dealer or a Bureau de Change (BDC).

He highlighted that traders on Binance often use pseudonyms, contravening laws requiring the disclosure of true identities in financial 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.

Akinwunmi argued that the service is a regulated activity that Binance was not authorized to perform.

After Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination. Nwite also ordered the Nigerian Correctional Services to produce Tigran Gambaryan’s medical reports, warning of consequences for noncompliance.

This crackdown on cryptocurrency activities follows the National Security Adviser’s classification of cryptocurrency trading as a national security issue.

The CBN directed fintech startups Opay, Moniepoint, Paga and Palmpay to block and report accounts engaging in cryptocurrency transactions.