Binance Exec Testifies, Says The Exchange Was Involved in Money Laundering

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Nigerian prosecutors have charged Binance and its executive Tigran Gambaryan with money laundering, asserting that the cryptocurrency exchange operated unlawfully within the country. The allegations were brought to light during a trial in Abuja, where Olubukola Akinwunmi, the head of payments policy and regulation at Nigeria’s central bank, testified against Binance.

Central Bank’s Testimony

In her testimony, Akinwunmi emphasized that Binance was not authorized to facilitate cryptocurrency trading for Nigerians. “The Central Bank of Nigeria did not issue any license to Binance,” Akinwunmi stated, responding to questions from lawyers representing the Economic and Financial Crimes Commission (EFCC), which is prosecuting Gambaryan and Binance. This point is crucial as Nigerian officials allege that the exchange enabled illicit transactions through its online exchange.

Binance in Trouble?

The prosecution’s argument hinges on the claim that the peer-to-peer (P2P) trading service offered by Binance functioned as a money laundering platform by allowing users to swap naira for other fiat currencies without proper authorization. “That kind of service requires authorisation by the Central Bank of Nigeria, either as an authorised giver or as a bureau de change,” Akinwunmi testified. She also highlighted that Binance’s P2P platform permitted pseudonymous entities to trade, which could complicate the tracking of transactions and compliance with local regulations.

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Binance’s Defense

Despite the charges, both Binance and Gambaryan deny any wrongdoing. Binance asserts that it enforces strict customer identity verification for Nigerian users, requiring local banking details and government-issued identification for trading. However, due to the ongoing legal issues, the exchange has discontinued its services for Nigerian users, leaving an estimated 13 million users searching for alternative platforms.

Health Concerns and Allegations of Hostage Taking

Gambaryan, Binance’s US-based compliance executive, has been incarcerated in Nigeria since April and has faced severe health issues, including malaria and pneumonia. His lawyer has condemned the prosecution as “state-sponsored hostage taking.” During the trial, it was revealed that Gambaryan collapsed in court in May, prompting Justice Emeka Nwite to order prison officials to provide him with proper medical attention.

Interestingly, despite President of Nigeria, Bola Ahmed Tinubu, spending one year in his position, the country’s regulations remains unclear.  A lot of work needs to be done before Nigeria is capable of adoption digital assets and the investors in the region might have access to policies introducing a better framework for digital assets.

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