ABUJA, Nigeria – Nigeria’s Securities and Exchange Commission, SEC, has outlawed the operations of Binance, the world’s largest crypto exchange, in the country, declaring it an unlicensed entity.
On Friday, June 9, 2023, the SEC stated that it had become aware of a website operated by Binance Nigeria Limited, soliciting the Nigerian public to trade crypto assets on its various web and mobile 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,” the SEC warned in its statement.
As the “regulator with the statutory mandate of investor protection,” the commission urged Nigerians to exercise caution when investing in crypto-assets and related financial products and services, especially if the service provider is not registered or regulated by the SEC.
“Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in total loss of their investment,” the statement added. The SEC also ordered Binance Nigeria Limited to “immediately stop soliciting Nigerian investors in any form whatsoever.”
The commission indicated it would announce further measures against the company and will cooperate with other Nigerian regulators to provide additional guidance on the matter.
This crackdown follows a similar move by the Central Bank of Nigeria, CBN, which prohibited cryptocurrency trading through official channels in 2021.
The ban on Binance’s operations in Nigeria exacerbates a challenging week for the global cryptocurrency exchange. On Monday, June 5, 2023, the United States SEC sued Binance, Binance.US, and Binance founder and CEO Changpeng “CZ” Zhao for alleged violations of federal securities laws.
The SEC claims that Binance, Binance.US, and Zhao offered unregistered securities to the general public in the form of the BNB token and the Binance-linked BUSD stablecoin.
The lawsuit also alleges that Binance’s staking service violated securities law.
Reports indicate that similar charges are leveled against BAM Trading – the operating company for Binance.US – and Binance, including failure to register as a clearing agency, broker, or an exchange.
The SEC has also alleged that Binance allowed the mixing of customer funds, that Zhao had “secret” control over Binance.US, and that a Zhao-owned entity was artificially inflating Binance.US’s trading volume.
