Binance operations in Nigeria is illegal – Nigeria’s SEC

Summary:

• According to the Securities and Exchange Commission (SEC) of Nigeria, Binance Nigeria, a branch of the international cryptocurrency exchange Binance, is operating illegally in Nigeria because it is neither registered with nor subject to the SEC's regulations.
• The SEC has advised Nigerian investors to exercise caution when dealing with unregistered and unregulated platforms like Binance Nigeria and warned them about the dangers of investing in cryptoassets.
• The SEC's move against Binance Nigeria is a part of a larger global trend among authorities to deal with the issues the cryptocurrency market is posing and safeguard investors.

In a statement, the Nigerian Securities and Exchange Commission (SEC) emphasized that Binance Nigeria is not registered with or subject to the SEC's regulation, making its operations in Nigeria illegal. 

In a statement posted to its website, the Securities and Exchange Commission (SEC) alleged that Binance Nigeria Limited, a branch of the well-known cryptocurrency exchange Binance, had been actively advertising its web and mobile platforms to Nigerian citizens.

However, the SEC has emphasized that Binance Nigeria's operations are unlawful under Nigerian law, encouraging Nigerians to use caution when transacting with unregistered and unregulated platforms like this. 

This notification follows a lawsuit filed by the U.S. SEC against Binance.US, the global exchange's U.S. affiliate, accusing it of running an unauthorized securities exchange. 
Additionally, the new Nigerian Finance Act for 2023 includes a 10% tax on digital assets. 

The SEC's Statement 

• The Securities and Exchange Commission (the Commission) has been made aware of Binance Nigeria Limited's website, which invites Nigerians to trade cryptocurrencies on its various 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. Dealings between members of the investing public and the entity are at the parties' own risk.
• The Commission urges Nigerians to exercise caution when investing in cryptoassets and financial products and services related to them if the service provider or its platform is not registered with or regulated by the Commission because it is the regulator with a statutory responsibility for investor protection.
• The following warning is issued to Nigerian investors: "Investing in crypto-assets is extremely risky and may result in the complete loss of your investment."
• Binance Nigeria Limited is hereby ordered to immediately cease soliciting Nigerian investors in any way by means of this circular. 
• "The Commission shall provide updates on additional regulatory actions regarding the operations of Binance Nigeria Limited and other comparable platforms and shall work with other regulators in Nigeria to provide further guidance on this matter," the statement reads. 

What You Should Understand 
The SEC's caution against buying cryptoassets serves as a reminder to Nigerian investors of the dangers associated with this quickly changing and frequently unpredictable sector.

• Despite their growing popularity around the world, cryptocurrencies still offer a substantial risk to investors because of their decentralized nature and lack of regulation.
• With multiple commercials appearing on billboards, online, and on TV in the country's biggest cities, Binance has recently expanded its activities there.
• The SEC's announcement regarding Binance Nigeria Limited is the first step in Nigeria's regulatory crackdown on unregistered and unregulated cryptocurrency platforms. 

The SEC's lawsuit against Binance Nigeria Limited also reflects an increasing trend among regulators around the world to confront the issues the cryptocurrency market has brought about.
 

What it implies
The Commission has committed to update the public on its efforts in resolving this problem and to work with other national regulatory organizations to establish thorough rules and regulations for the crypto market. 

• The SEC wants to protect Nigerian investors' interests and make sure they have access to regulated and open investment alternatives.
• The SEC wants to instill confidence in the cryptocurrency sector and guard unwary investors from falling for scams, so it is cracking down on unregistered platforms.
• While there are many potential advantages of cryptocurrencies, such as financial inclusion and technological advancement, regulatory monitoring is important to safeguard investors and maintain market integrity.
• Like many other nations, Nigeria is still developing complete rules for the cryptocurrency business.

Investors should follow developments from the SEC and other regulatory authorities as Nigeria develops its regulatory framework for the cryptocurrency sector. Nigerian investors may navigate the cryptocurrency market with more confidence and preserve their hard-earned money by becoming informed and looking for reputable, regulated platforms.