Binance Faces Regulatory Heat in Nigeria as Operations Declared Illegal

In a significant development in the cryptocurrency sector, Binance, the world’s largest cryptocurrency trading platform, has been ordered to halt its operations in Nigeria. The directive was issued by the Nigerian Securities and Exchange Commission (SEC), which declared Binance Nigeria Limited’s operations as illegal due to its unregistered status.

The SEC’s announcement on Friday, June 9, 2023, has sent ripples through the crypto community. The commission stated, “Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal.” This move is seen as the first action taken by the regulator against a major exchange platform.

The SEC’s decision follows a lawsuit filed by the U.S. Securities and Exchange Commission against Binance, accusing it of failing to register as a broker or exchange and offering unregistered securities to the general public. The Nigerian SEC has warned that any member of the investing public dealing with Binance is doing so at their own risk.

The commission has also urged Nigerians to exercise caution when investing in crypto-assets, especially if the service provider or their platform is not registered or regulated by the Commission. The SEC has directed Binance Nigeria Limited to immediately stop promoting its platform to Nigerian investors.

The SEC’s move comes amidst a global regulatory crackdown on cryptocurrency exchanges. Binance, registered in the Cayman Islands, is known as the world’s largest platform for buying and selling cryptocurrencies and other digital assets. However, it has faced increasing scrutiny from regulators worldwide.

In addition to the SEC’s directive, Binance is also under investigation by the U.S. Department of Justice and the Commodity Futures Trading Commission for allegedly operating illegally in the U.S.

The Nigerian SEC has pledged to provide updates on further regulatory actions concerning Binance and similar platforms. It also plans to collaborate with other regulators in Nigeria to provide further guidance on this matter.

This development underscores the increasing regulatory scrutiny faced by cryptocurrency platforms worldwide. As the crypto industry continues to grow, the need for clear regulatory frameworks and investor protection measures becomes increasingly crucial.