The Nigerian Securities and Exchange Commission (SEC) has issued a circular stating that Binance Nigeria, the local affiliate of the cryptocurrency exchange Binance, is operating unlawfully.
This development came swiftly after Binance’s U.S. affiliate encountered its challenges, being compelled to suspend dollar deposits and withdrawals.
The SEC has warned Nigerian residents against engaging with the platform and highlighted the risks associated with investing in crypto assets or related products when the service provider is not registered or regulated by the commission.
Binance Nigeria Deemed Illegal and Risky
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The Nigerian SEC’s circular declared the operations of Binance Nigeria as illegal, leaving no room for uncertainty. By doing so, the regulatory body sought to dissuade Nigerian investors from participating in any form of association with the platform.
However, the SEC emphasized the utmost risks associated with investing in crypto assets and reiterated its stance against this asset class.
The commission cautioned that engaging with unregistered or unregulated service providers, such as Binance Nigeria, puts individuals at their own risk. Furthermore, the SEC directly addressed Binance Nigeria Limited, instructing it to immediately cease soliciting Nigerian investors.
Promised Regulatory Actions Against Binance Nigeria
The Nigerian Securities and Exchange Commission (SEC) has pledged to take further regulatory actions against Binance Nigeria and similar platforms. This indicates that the SEC is looking to tighten its oversight of cryptocurrency exchanges operating within Nigeria.
The SEC’s actions align with the ongoing legal challenges faced by Binance and its affiliates worldwide, including a lawsuit initiated by the United States against Binance and efforts to freeze the exchange’s assets held in the country. These legal battles have created uncertainty regarding the future of Binance’s global operations.
The Stakeholders in the Blockchain Technology Association of Nigeria (SIBAN), the country’s prominent blockchain and crypto association, have expressed support for the SEC’s decision. SIBAN views the regulatory body’s actions as a positive step toward ensuring a well-regulated market. However, it is worth noting that SIBAN had previously released a statement, later withdrawn, urging the SEC to involve local stakeholders in the process of drafting regulations. SIBAN believed that collaboration with local businesses would foster a thriving digital asset market within Nigeria.
In their statement, the SIBAN team also requested the SEC to establish systems that support the implementation of a national blockchain policy. They believe that such measures would contribute to the growth and success of Nigeria’s blockchain and crypto industry. The association expressed its willingness to collaborate with the regulatory body for the benefit of Nigeria as a whole.
In conclusion, the Nigerian SEC has declared Binance Nigeria illegal and warned against its use. It faces global legal challenges, including a US lawsuit seeking asset freezes. SIBAN supports the SEC’s decision but urges collaboration and a national blockchain policy. Stay updated with official sources and news for developments.