The Securities and Exchange Commission has ruled that Binance’s operations are illegal in Nigeria, which might make it even harder for ordinary Nigerians to access cryptocurrencies.
This is in line with a circular that was made public and dated June 9, 2023 and posted on the commission’s website. The commission declared that Binance is operating illegally in the country because it is neither registered with it nor subject to its regulation.
It was stated that using the exchange for commerce was done at the user’s own risk. The Securities and Exchange Commission (the Commission) has been alerted to a website run by Binance Nigeria Limited that invites Nigerians to trade cryptocurrencies on a variety of its web and mobile platforms.
Binance Nigeria Limited’s operations in Nigeria are unlawful because it is not registered with nor subject to regulation by the Commission. Everyone who is a part of the investing public and interacts with the entity does so at their own risk.
The commission also cautioned Nigerians against investing in cryptocurrencies, as well as financial services and goods related to them, if the platform or service provider is not one of its registered or regulated entities.
“Investors in Nigeria are hereby warned that trading in crypto-assets is extremely risky and may result in the complete loss of their investment,” it continued.
Binance Nigeria Limited is hereby ordered to immediately cease soliciting Nigerian investors in any way by means of this circular.
The SEC also announced that it would update the public on any additional regulatory measures relating to the operations of Binance Nigeria Limited and other platforms of a same nature and that it would collaborate with other national regulators to offer more clarification on this subject.
The biggest cryptocurrency platform in the world, Binance, has been involved in various legal disputes all around the world.
The US Securities and Exchange Commission charged Binance for violating US laws on Monday. Binance US announced on Thursday that it was halting deposits and withdrawals made in US dollars as a result of SEC enforcement action.
In an effort to safeguard its users and platform, Binance said, “Today, we are stopping USD deposits and informing users that our banking partners are getting ready to halt fiat (USD) withdrawal channels as early as June 13, 2023. We urge clients to use their USD in the proper manner.
The SEC’s action is expected to shake up the cryptocurrency sector, especially in light of recent problems with other well-known platforms like Paxful. Another significant cryptocurrency platform, Paxful, ceased down in April 2023 as a result of regulatory issues and substantial personnel departures.
This SEC action is unlikely to concern cryptocurrency users, according to Chimezie Chuta, the founder and coordinator of the Blockchain Nigeria User Group. He claimed that because there are now no licensed exchanges in the nation, the cryptocurrency sector will continue to function normally.
He stated, “SEC is merely raising an alarm in response to FIRS’s intention to begin taxing cryptocurrency. None of the exchanges in Nigeria are authorized to conduct business but legitimacy is also a problem. The difficulty is that you cannot legally seek recourse if you have complaints about the platforms. You cannot sue Binance, for example, if you have a problem with them”.
“I don’t think this will have an impact on traders because they are already informed. Anyone who doesn’t know is likely new to the area. Although Binance is registered as a tech firm in the nation, the SEC, which oversees the capital market, is responsible for granting licenses to exchanges in order for them to function” he continued.
He pointed out that platforms need to have a bank account in order to be licensed. But due to a ban on cryptocurrency in the established financial system by the Central Bank of Nigeria, this is not possible.
