A Director with the Securities and Exchange Commission (SEC), Abdulkadir Abbas, testified on Friday before a Federal High Court in Abuja, detailing how Binance Holdings Ltd breached Nigerian law to operate naira peer-to-peer services in exchange for crypto assets.
Abbas, the Director of Registration, Exchanges, and Market Infrastructure Department at SEC, revealed this while giving evidence before Justice Emeka Nwite in the trial of Binance and two of its officials on charges related to money laundering.
Abbas, the 1st prosecution witness (PW1), noted that due to the large number of Nigerian users leveraging this model, it adversely affected the official exchange rate.
“As a matter of fact, the Binance platform became a reference point for determining the exchange rate,” he added.
The Economic and Financial Crimes Commission (EFCC) filed a 5-count charge against Binance and Tigran Gambaryan as the 1st and 2nd defendants, while Nadeem Anjarwalla was listed as being at large.
Led in evidence by prosecuting lawyer, Ekele Iheanacho, Abbas stated that the company’s operations negatively impacted Nigeria’s financial system.
He highlighted that not only did Binance operate in Nigeria illegally, but its mode of operation circumvented the normal currency trading route set by regulators.
Abbas recalled meeting Gambaryan once during a meeting at the office of the National Security Adviser (NSA).
He said that Binance and its officials were invited by the NSA to discuss its operations and their impact on the Nigerian economy.
“At the meeting, it was clearly observed that the 1st defendant’s (Binance) mode of operation is against the provision of the Investment and Securities Act, 2007.
“Apart from not being registered in Nigeria and making public solicitation without authorisation, the 1st defendant operates a naira peer-to-peer (P2P) in exchange for crypto assets,” Abbas testified.
He explained how the naira P2P model, coupled with the large number of Nigerian users, adversely affected the official exchange rate, creating uncertainty and volatility.
“The naira P2P rate quoted on Binance’s platform is not referencing any official rate, and its continuous operation affects the value of our naira,” he stated.
Abbas stressed that Binance’s platform, being unregistered and unregulated by the SEC in Nigeria, violated the Investment and Securities Act, 2007.
“In addition, by making public solicitation to Nigerians without due authorisation by the SEC, the 1st defendant violated the Investment and Security Act,” Abbas concluded.
The cross-examination was adjourned till May 23 at 12 noon.
(NAN)
