HomeCourt room newsBinance Trial: Nigerian Users Transact Using Fictitious Names – Witness

Binance Trial: Nigerian Users Transact Using Fictitious Names – Witness


A deputy director at the Central Bank of Nigeria (CBN), Olubukola Akinwumi, explained on Friday how Nigerians trading on Binance Holdings Limited’s platform use false names in the transactions.

Mr Akinwumi, who is the Economic and Financial Crimes Commission (EFCC) ‘s second prosecution witness in the ongoing trial of the cryptocurrency firm and its executive, Tigran Gambaryan, said this in his testimony before the trial judge, Emeka Nwite, of the Federal High Court, Abuja.

The News Agency of Nigeria (NAN) reports that the EFCC had filed five counts against Binance and Mr Gambaryan (1st and 2nd defendants) bordering on money laundering offences.

The anti-graft agency had accused Binance and Mr Gambaryan of money laundering involving $35.4 million.


Led in evidence by EFCC’s lawyer, Ekele Iheanacho, the witness who heads the Payment Policy and Regulation Division in the Payments System Management Department of the CBN, said the bank did not issue any licence to the cryptocurrency firm to operate in Nigeria.

“In the course of carrying out our operations, we normally monitor development within the SEC (Securities and Exchange Commission), monitoring the activities of payment service providers and the usage of the payment system.

“We observed in doing that that Binance provides a trading platform where users trade virtual assets.

“And to consummate their transactions for the purpose of settlement of payments, the users make use of the payment system for the purpose of transferring or making payment to one another.

“These traders normally trade in pseudo-names (pseudonyms) that hide their identities and they are not authorised by the CBN,” he said.

The prosecution witness described virtual assets as a “digital representation of values created by computer systems which can be digitally traded, transferred or used in payments.”

Binance platform

He said they discovered that platform users received and made payments or transferred payments to one another using the payment system to consummate transactions on Binance Peer-to-Peer (P2P) platform.

“Binance platform provides a trading place or marketplace for traders and users of virtual assets, otherwise known as cryptocurrency.
“The platform also provides other services like electronic wallet, fiat wallet, publishing of exchange rate, etc,” he told the court.

Asked where Binance’s activities are carried out, Mr Akinwumi said that “activities are conducted on its website, binance.com, and through its mobile apps.

“They have two variations of Binance apps: Binance Pro or Binnace Lite.”

Asked what P2P means, the witness said, “P2P means Peer to Peer, and for basic translation, it can also mean person to person.

“What that means is that if a particular user does not want to trade with the platform but rather would like to trade with another user, P2P is a service that brings such two users as described to engage each other in transacting for the purpose of buying or selling virtual asset, cryptocurrency and fiat directly between the two users.

“This is done by quoting rates with offers to sell or buy at the quoted rate.

“The P2P Platform of Binance provides such service to such two users to come to an agreement on such trade.

“Once the two users on the Binance platform reach such understanding for the trade, the selling party will provide a bank account to which the buying party can send the naira amount or transfer it into the account provided by the selling party.

“Once the buying party transfers the amount agreed, he clicks on a particular icon on Binance platform to communicate the fiat that he has transferred the amount to the selling party.

“The Binance platform will, on the side of the selling party, await confirmation based on which it will release the cryptocurrency or fiat currency traded on the platform.

“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.”

Binance documents

Submission of certified true copies of documents made available to SEC by Binance, which was equally made available to the investigating team at the office of the National Security Adviser, and pages generated on the firm’s website were tendered in evidence and marked as Exhibits 8 and 9 by the judge.

Taking the witness through Exhibits 8 and 9, Iheanacho asked him to tell the court more about the nature of the transactions.

Mr Akinwumi said that Page 2 of Exhibit 8 introduced Binance as the world’s leading crypto exchange, with users from over 190 countries.

“They have the full address of the website on the page, which is https://www.binance.com.

“Binance has what is called Binance Academy. That is on page 16 of Exhibit 8.

“Some of the videos will be on their YouTube platform which they use in educating those who are interested in the services that they provide,” he said.

The prosecution said the firm has Binance coins, and on its website, it describes the coin as “NGN” (Naira).

“On page 21 of Exhibit 8, it listed the ways to use Binance coin,” he added.

Mr Akinwumi said that page 9 of Exhibit 9 has information that reads: “Depositing and withdrawing NGN (Naira) on Binance via cash link; it is swift and simple.”

The witness, however, explained that depositingEFCC accused Binance and Mr Gambaryan of money laundering involving $35.4 million. and withdrawing Naira, which “NGN” stands for Naira, is a regulated activity carried out by banks and other financial institutions duly registered by CBN.

He said another piece of information on Exhibit 9 reads: “To help Binance users in Nigeria understand this Fiat Gateway, Binance has been holding various events such as the Binance Cash Link, Live Master Class to educate users on cash link and why it is an excellent method of deposit and withdrawal on the Binance platform.”

“Generally, Exhibit 9 explains to Nigerians on how to deposit Naira in the Nigerians wallet on the Binance platform.”

He said there is a statement on a page which says that although “Binance does not charge deposit fees,” there is another message which says: “For each withdrawal, a flat fee is paid by users to cover the transaction cost of moving the cryptocurrency out of their Binance account.

“So, as I explained earlier, Binance maintains accounts and needs revenue for its services.

“Page 2 of Exhibit 9, under the Fiat Section, shows the rates applied for regular users.”

After giving his evidence, the judge, Mr Nwite, adjourned the matter until 16 July for cross-examination of the witness.


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