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CBN in Court, Claims Binance Operated Illegally in Nigeria

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Tigran Gambaryan, Binance executive
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Central Bank of Nigeria (CBN) has told the Federal High Court of Nigeria in Abuja, that Binance, crypto exchange performed banking services without proper authorization.

CBN in Court, Claims Binance Operated Illegally in Nigeria

Olubukola Akinwunmi, head of payment policy and regulation at the CBN, testified before Justice Emeka Nwite of the Federal High Court of Nigeria, asserting that Binance’s deposit and withdrawal transactions should be reserved for banks and authorized financial institutions.

The federal government has accused Binance and Tigran Gambaryan and Nadeem Anjarwalla, its executives of conspiring to obscure the origins of $35.4 million in financial proceeds from illegal activities in Nigeria.

During the trial, Akinwunmi, led by Ekele Iheanacho, counsel for the Economic and Financial Crimes Commission (EFCC), stated that Binance’s website misled Nigerians into using its platform for naira transactions via a cash link.

The platform promoted fee-free deposits and flat-fee withdrawals, activities regulated by the CBN and reserved for licensed banks and financial institutions.

Akinwunmi claimed that Binance also facilitated currency conversion from naira to United States dollars, which requires CBN authorization as an authorized dealer or a Bureau de Change (BDC).

He highlighted that traders on Binance often use pseudonyms, contravening laws requiring the disclosure of true identities in financial transactions.

The witness detailed the peer-to-peer transaction process on Binance, where the buying party transfers naira to the selling party’s bank account and confirms the transaction on the platform, prompting Binance to release the cryptocurrency or fiat currency.

Akinwunmi argued that the service is a regulated activity that Binance was not authorized to perform.

After Akinwunmi’s testimony, the court adjourned until July 16 for the defense’s cross-examination. Nwite also ordered the Nigerian Correctional Services to produce Tigran Gambaryan’s medical reports, warning of consequences for noncompliance.

This crackdown on cryptocurrency activities follows the National Security Adviser’s classification of cryptocurrency trading as a national security issue.

The CBN directed fintech startups Opay, Moniepoint, Paga and Palmpay to block and report accounts engaging in cryptocurrency transactions.

 

 

 

 


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E-Financial

African Union Launches Credit Rating Agency to Promote Regional Economic Integration

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The African Union has taken a significant step towards promoting economic resilience in Africa with the launch of the African Credit Rating Agency (AfCRA).

The new agency aims to provide a fair, transparent, and unbiased credit rating system, addressing the biases of global rating firms that have reportedly cost Africa over $75 billion in investment opportunities.

According to Kenya’s President, William Ruto, who unveiled the agency at an AU event in Addis Ababa, Ethiopia on Friday, “Global credit rating agencies have not only dealt us a bad hand, they have also deliberately failed Africa.”

Ruto criticized the flawed models, outdated assumptions, and systemic bias used by global rating agencies, which paint an unfair picture of African economies and lead to distorted ratings, exaggerated risks, and unjustifiably high borrowing costs.

The launch of AfCRA is a response to the long-standing grievances of African countries regarding their treatment by international credit rating firms.

The agency aims to provide fair, transparent, and development-focused credit ratings that reflect the realities and potential of African economies.

Improving Africa’s rating by one notch could unlock $15.5 billion in additional funding for the continent, according to Ruto.

The idea of creating an African credit rating agency has been in the pipeline for years, with the AU officially announcing its plans to move forward with the project in September 2023.

The push for an African credit rating agency gained momentum in 2022 when Senegal’s former president Macky Sall called for a new system to “end the injustices” faced by African countries.

The African Credit Rating Agency is part of Africa’s continuous march towards economic resilience, which also includes the recent establishment of the African Energy Bank, headquartered in Nigeria.

The bank aims to provide support to unleash Africa’s energy potential and bring an end to energy poverty on the continent.

 


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Nigeria Worst Hit by Crypto Currency Fraud

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Fraud in the crypto industry in African continent has soared by 48 percent over the past year and Nigeria is worst hit according to report by CAJ News.

Nigeria Worst Hit by Crypto Currency Fraud

This is according to the Sumsub State of the Crypto Industry 2025 report, which indicates Nigeria recorded the highest rate of fraud across the sector, at 8,3 percent.

Thus, this percentage of verification attempts were flagged as fraudulent.

Uganda, Kenya and Tanzania all have fraud rates of 4,8 percent, with Cameroon (4,5 percent), Ethiopia (3,7 percent), Ghana (3,5 percent), Algeria (2,6 percent), Benin (2,6 percent) and Morocco (2,1 percent) recording significant rates.

The most popular fraud types are document forgery (affecting 31 percent of surveyed companies), phishing (20 percent) and money mulling (15 percent), followed by account takeover (14 percent) and forced verification (12percent).

Simsub, the cyber crime expert, believes this surge highlights the need for companies to adopt artificial intelligence (AI)-powered detection, biometrics and continuous monitoring to enhance security.

 

The report states that innovations like biometric checks, AI-backed automation and document-free verification have boosted crypto platform users’ on-boarding success rates to 93,39 percent and reduced verification time by 46 percent, overall improving customer on-boarding while reducing drop-off cases.

Hannes Bezuidenhout, Vice President of Business Development (Africa) at Sumsub, said Africa’s growing adoption of crypto provided its own challenges, but the company foresaw increasing demand and growing user expectations across the continent.

“So it’s crucial for VASPs operating in the region to implement secure verification systems and stay vigilant to fraud, while keeping an eye on evolving and new regulations concerning the crypto sector to avoid fines.”

VASP is an acronym for virtual asset service provider.

 

 


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Banking Consolidation Less Likely as Nigerian Banks Meet Capital Requirements – Fitch

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Fitch Ratings has said that Nigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements. The rating agency noted that the banks are generally on track to meet the end-of-first quarter (Q1) 2026 deadline.

This is supporting a recovery in capitalisation from the impact of naira devaluation, providing fuel for business growth. It also reduces the likelihood of significant banking sector consolidation.

In March 2024, the Central Bank of Nigeria announced a significant increase in paid-in capital requirements (share capital plus share premium) for commercial, merchant and non-interest banks.

Banks have three ways to comply – through equity injections, M&A and downgrading their licence authorisation.

Fitch-rated banks have made notable progress towards compliance. Almost all have raised capital or formally launched the process to do so.

The two largest banks, Access Holdings and Zenith Bank, are the first to secure enough fresh capital to meet the N500 billion requirement for an international licence. First HoldCo, United Bank for Africa and Guaranty Trust Holding Company are taking a phased approach.

They have recently raised capital and have shareholder approval to begin raising more to meet the N500 billion requirement. First HoldCo’s and United Bank for Africa’s recent rights issues are awaiting final regulatory approval.

Fidelity Bank and FCMB Group have completed initial capital raisings but will need to raise more to maintain their international licences. As second-tier banks, they must raise significantly more capital relative to their balance sheets than larger banks.

They have extraordinary general meeting approval for this, although they could consider downgrading to a national licence as they each have just one foreign subsidiary.

Ecobank Nigeria Limited (ENG) and Jaiz Bank needed only small capital injections to meet their requirements and have already achieved compliance. We estimate that ENG is still in breach of its total capital adequacy ratio (CAR) requirement of 10 percent but it has further capital-raising plans to restore compliance. Stanbic IBTC Holdings has launched a rights issue to raise capital to maintain its national licence.

Strong investor appetite has ensured that the vast majority of capital raisings so far have been successful, and most first- and second-tier banks should be able to meet their new capital requirements through capital raisings alone. Therefore, we believe the likelihood of banking sector consolidation among first- and second-tier banks has decreased.

Union Bank of Nigeria (UBN), which is also in breach of its 10 percent CAR requirement, and third-tier banks have generally been slower to raise capital. Wema Bank has shareholder approval to raise enough capital to retain its national licence and plans to launch the process in April.

Coronation Merchant Bank recently received board approval. It is not clear whether UBN and unrated third-tier banks have received the necessary approvals. M&A activity and licence downgrades remain more likely among third-tier banks.

The capital raisings are contributing to a recovery in capitalisation from the impact of naira devaluation, which put pressure on capital ratios and increased US dollar credit concentration risks. Strengthened buffers over minimum CAR requirements will mitigate risks from a challenging operating environment, including regulatory intervention and further naira volatility, while providing room for business growth.

The capital raisings are unlikely to lead to banks with Long-Term Issuer Default Ratings (IDRs) of ‘B-’ being upgraded given the constraint of Nigeria’s ‘B-’/Positive Long-Term IDR.

However, they could contribute to Outlook revisions to Positive for some banks, and, providing CAR compliance is restored, to upgrades for UBN and ENG (both rated ‘CCC’). Capital raisings are more likely to affect National Long-Term Ratings, which measure the relative creditworthiness of Nigerian issuers.

 


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