Binance operations in Nigeria is illegal – Nigeria’s SEC

  • The Securities and Exchange Commission (SEC) of Nigeria has stated that Binance Nigeria, a subsidiary of global cryptocurrency exchange Binance, is operating illegally in Nigeria as it is not registered or regulated by the SEC.
  • The SEC has warned Nigerian investors about the risks associated with investing in crypto-assets and urged them to be cautious when dealing with unregistered and unregulated platforms like Binance Nigeria.
  • The SEC’s action against Binance Nigeria is part of a broader trend among regulators worldwide to address the challenges posed by the cryptocurrency market and protect investors.

The Securities and Exchange Commission (SEC) of Nigeria has issued a statement emphasizing that Binance Nigeria is not registered or regulated by the SEC, making its operations in Nigeria illegal. 

According to a statement published on its website, SEC claimed Binance Nigeria Limited, a subsidiary of the well-known global cryptocurrency exchange Binance, has been actively promoting its web and mobile-enabled platforms to the Nigerian public.

However, the SEC has made it clear that the company’s activities are in violation of Nigerian law urging Nigerians to exercise caution when dealing with unregistered and unregulated platforms such as Binance Nigeria. 

This notice comes after Binance.US, the U.S. subsidiary of the global exchange, was sued by the U.S. SEC, accused of operating an illegal securities exchange. This also comes after Nigeria passed a 10% tax on digital assets in its new Finance Act for the year 2023. 

What the SEC Said 

“The attention of the Securities and Exchange Commission (the Commission) has been drawn to the website operated by Binance Nigeria Limited, soliciting the Nigerian public to trade crypto assets on its various web and mobile-enabled platforms.” 

“Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal. Any member of the investing public dealing with the entity is doing so at his/her own risk. “

“As the regulator with the statutory mandate of investor protection, the Commission urges Nigerians to be wary of investing in crypto-assets, and crypto-asset related financial products and services if the service provider/its platform is not registered or regulated by the Commission. Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in total loss of their investment.”

By this circular, Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever.” 

“The Commission shall provide updates on further regulatory actions with respect to the activities of Binance Nigeria Limited, and other similar platforms and shall work with other regulators in Nigeria to provide further guidance on this matter.” 

What You Should Know 

The SEC’s warning about investing in crypto-assets is a reminder to Nigerian investors about the risks involved in this rapidly evolving and often unpredictable market.

  • While cryptocurrencies have gained popularity worldwide, their decentralized nature and lack of regulation expose investors to significant risks.
  • Binance has recently stepped up its operations in Nigeria with several advertisements popping up on billboards, online, and on TV across major cities in the country.
  • The SEC’s circular regarding Binance Nigeria Limited marks the beginning of regulatory actions against unregistered and unregulated crypto platforms in Nigeria. 

The SEC’s action against Binance Nigeria Limited is also indicative of a growing trend among regulators worldwide to address the challenges posed by the cryptocurrency market.

What this means

The Commission has vowed to provide updates on its progress in addressing this issue and to collaborate with other regulatory bodies within the country to establish comprehensive guidelines and regulations for the crypto market. 

  • The SEC’s aim is to safeguard the interests of Nigerian investors and ensure that they have access to transparent and regulated investment opportunities.
  • By cracking down on unregistered platforms, the SEC hopes to instill confidence in the crypto market and protect unsuspecting investors from falling victim to fraudulent schemes.
  • While cryptocurrencies offer numerous potential benefits, including financial inclusion and technological innovation, regulatory oversight is necessary to protect investors and ensure market integrity.
  • Nigeria, like many other countries, is in the early stages of formulating comprehensive regulations for the crypto market.

As Nigeria continues to develop its regulatory framework for the crypto market, investors should stay informed about updates from the SEC and other regulatory bodies. By educating themselves and seeking out reliable and regulated platforms, Nigerian investors can navigate the crypto market with greater confidence and protect their hard-earned capital. 

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