Nigeria SEC declares Binance operations in country illegal

Binance Nigeria, a subsidiary of the world’s largest cryptocurrency trading platform Binance, was officially declared illegal by the Securities and Exchange Commission (SEC) of Nigeria. On July 9, the SEC issued a statement indicating that Binance had been promoting its web and mobile platforms to Nigerian users without adhering to regulatory requirements or registering with the commission.

The SEC expressed concerns, emphasizing that Binance Nigeria lacks authorization or regulation by the commission, rendering its operations in the country unlawful. As the primary regulatory body responsible for safeguarding investors, the SEC warned of significant risks associated with engaging with Binance Nigeria or similar unregistered platforms. Investors were advised to exercise caution when dealing with crypto-assets and related financial products and services.

This action by Nigeria’s SEC follows a lawsuit filed by the U.S. securities watchdog against Binance, alleging the global crypto exchange’s failure to register as a broker or exchange. The lawsuit further accused Binance of offering and selling unregistered securities to the public. These legal challenges are placing pressure on Binance, which currently holding the top position in terms of market capitalization among all crypto exchanges.

Nigeria’s SEC implemented regulations for digital assets last year, reflecting the country’s attempt to strike a balance between an outright ban on cryptocurrencies and unregulated usage. This move followed the ban imposed by the central bank of Nigeria in 2021, which prohibited banks and financial institutions from facilitating transactions or dealing with digital currencies.

Despite these restrictions, young Nigerians have embraced cryptocurrencies and utilized peer-to-peer trading platforms offered by crypto exchanges to circumvent the ban imposed by traditional financial institutions. With increasing regulatory scrutiny on the global crypto industry, authorities emphasize the importance of investor protection and compliance within the sector.

The actions taken by Nigeria’s SEC underscore the growing regulatory focus on cryptocurrency exchanges and their operations. The outcome of these legal challenges will have significant implications for the future of crypto regulations not only in Nigeria but also on a global scale.

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