Binance Faces Intensified Legal Charges in Nigeria Over Alleged $35.4 Million Money Laundering Case

The amended six-count charge, presented before Justice Emeka Nwite at the Federal High Court in Abuja, includes allegations of laundering $35.4 million, operating without proper authorization, and engaging in illicit foreign exchange transactions.

The EFCC accuses Binance and Anjarwalla, who is reportedly on the run after fleeing detention earlier this year, of concealing proceeds from unlawful activities. These actions allegedly violate the Money Laundering Prevention and Prohibition Act of 2022. Furthermore, Binance is charged with operating as an unlicensed financial institution under the Banks and Other Financial Institutions Act of 2020 and conducting unauthorized foreign exchange operations against the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.

Evidence to confirm the amended charges was led by the commission’s counsel, Ekele Iheanacho SAN, at Monday’s hearing, which followed the earlier discharge of another Binance executive, Tigran Gambaryan, for health complications that were raked up by diplomatic intervention. Justice Nwite returned a not-guilty plea in favor of the defendants in line with practice in Nigeria, in the absence of Binance or its representatives.

This case highlights Binance’s increased regulatory scrutiny in Nigeria, which is experiencing rapid adoption of digital currency usage despite the government’s restrictive position. Earlier this year, the Central Bank of Nigeria (CBN) declared cryptocurrency trading a national security concern, pushing fintech companies to freeze accounts implicated in such activity. The CBN also chastised Binance for providing financial services such as deposits and withdrawals, which it claimed should be reserved for licensed banks.

Dr. Olubukola Akinwunmi, Head of Payment Policy and Regulation at the CBN, previously testified against Binance. He highlighted the platform’s alleged unauthorized financial operations, emphasizing that such services undermined the integrity of the Nigerian financial system.

The amended charges against Binance and its executives highlight a broader crackdown on crypto operations in Nigeria. In February 2024, authorities detained both Anjarwalla, Binance’s regional manager for Africa, and Gambaryan, the platform’s head of financial crime compliance. While Anjarwalla fled detention, Gambaryan was released in October following diplomatic pressure.

The EFCC also noted that Binance’s operations were inconsistent with Nigeria’s anti-money laundering regulations, which recently led to penalties against two crypto firms. These companies were fined a combined $30,000 for illegal transactions and ordered to adopt better compliance measures.

The Federal High Court has rescheduled the trial for November 25, 2024, and February 25, 2025, to allow for more hearings and cross-examinations. Meanwhile, the EFCC is anticipated to develop its case against Binance and its officials since the defendants’ absence complicates procedures.

Despite its prominence as a cryptocurrency exchange, Binance faces several legal and regulatory challenges. Earlier this month, Binance faced allegations of facilitating unregistered securities trading in the United States, leading to heightened regulatory pressure. The outcome of the Nigerian case adds to the growing global debate on cryptocurrency oversight and could have implications for its operations in one of Africa’s largest markets.