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SEC Bans Binance Operations in Nigeria

By Adedapo Adesanya

Nigeria’s Securities and Exchange Commission has banned the operations of the world’s largest crypto exchange, Binance, in the country, declaring it an illegal entity.

In a statement signed on June 9, the commission said its attention had been drawn to the website operated by Binance Nigeria Limited, soliciting the Nigerian public to trade crypto assets on its various web and mobile-enabled 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,” parts of the statement read.

Regarding itself as “the regulator with the statutory mandate of investor protection, the commission urged Nigerians to be wary of investing in crypto-assets and crypto-asset related financial products and services if the service provider/its platform is not registered or regulated by the commission.”

“Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in total loss of their investment.

“By this circular, Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever,” the SEC noted.

Further, the SEC said it would announce more measures against the company.

“The commission shall provide updates on further regulatory actions with respect to the activities of Binance Nigeria Limited and other similar platforms and shall work with other regulators in Nigeria to provide further guidance on this matter.”

Recall that the Central Bank of Nigeria (CBN) banned the trading of cryptocurrency through official channels in 2021.

The ban on Binance operations in Nigeria further adds to the compounding problems faced by Binance this week after the US SEC sued the crypto exchange, the operating company for Binance.US and Binance founder and CEO Changpeng “CZ” Zhao on allegations of violating federal securities laws on Monday.

It said Binance, Binance.US and Mr Zhao offered unregistered securities to the general public in the form of the BNB token and Binance-linked BUSD stablecoin, which also alleges that Binance’s staking service violated securities law.

Business Post also understands that there are similar charges against BAM Trading – the operating company for Binance.US – and Binance itself, including failure to register as a clearing agency, failure to register as a broker and failure to register as an exchange.

The SEC also alleged that Binance allowed for the commingling of customer funds, that CZ was “secretly” controlling Binance.US and that a CZ-owned and operated entity was inflating Binance.US’s trading volume.

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