Nigeria’s Central Bank Raises Concerns Over Binance, Alleging Money Laundering and Unlawful Activities
Binance, the world’s leading cryptocurrency exchange, finds itself embroiled in yet another controversy, with its new CEO, Richard Teng, reportedly summoned by Nigeria’s House of Representatives Committee on Financial Crimes. Teng assumed the helm of Binance in November 2023, following the departure of its founder and former CEO, Changpeng Zhao, who faced legal challenges in the United States over money laundering violations. However, the transition of leadership has not shielded Binance from scrutiny, as suspicions mount regarding the exchange’s potential involvement in money laundering and terror financing activities.
Amidst the burgeoning crypto landscape in South Africa and beyond, regulatory authorities are intensifying their scrutiny of cryptocurrency-related operations to combat illicit financial activities. Nigeria’s Central Bank (CBN) has sounded the alarm, alerting Nigerian authorities to potential irregularities in fund transfers facilitated through Binance’s platform. Against this backdrop, Ginger Onwusibe, chairperson of the financial crimes committee, has issued a summons to Binance officials, including CEO Richard Teng, calling for their appearance before Nigerian authorities to address these concerns.
According to reports from local Nigerian publication Punch, Binance has been given a seven-day ultimatum to comply with the summons, with the deadline set for Monday, March 4. However, details regarding Teng’s engagement with Nigerian authorities remain undisclosed at this time. The summons underscores the growing regulatory pressure faced by cryptocurrency exchanges worldwide, highlighting the imperative of robust compliance measures and transparency in the crypto industry to mitigate the risks of financial crime and illicit activities.
Onwusibe, in the summon to Binance, has also reportedly warned the exchange that it could take appropriate measures to tackle with the suspicions if representatives of the firm fail to schedule a meeting. The CBN has red-flagged Binance’s crypto exchange platform for being misused for money laundering and other unlawful activities.
“It is also our duty to do everything in our power to protect Nigerian investors from predatory firms, and no distraction and manipulation can stop us. The allegations of terrorism financing, money laundering and tax evasion amongst others levelled against Binance are damning enough,” Punch quoted Onwusibe as saying.
Nigeria is taking steps to prevent financial crimes in the nation especially now that its economy is undergoing a recession-like climate. The country is getting stricter in terms of dealing with foreign companies. Calling Binance out, Onwusibe has disclosed that the company has neither registered its business in Nigeria nor has it established an office to address user grievances.
This is not the first time, that Binance has found itself under legal scanner. In November 30, the Securities and Exchange Commission of Philippines had decided to block access to the world’s largest crypto exchange. At the time, Philippines had claimed that Binance had not registered its operations with the authorities.