Binance’s Nigerian Operations Declared Illegal by SEC; What Next?

Published by

Qadir AK

July 31, 2023

Binance’s Nigerian Operations Declared Illegal by SEC

Nigeria’s Securities and Exchange Commission (SEC) recently issued a stern notice aimed at cryptocurrency exchange giant Binance and its activities within the country. According to the SEC, Binance’s operations are considered illegal in Nigeria as the company is not registered nor regulated by the commission. As a consequence, the notice also instructed all cryptocurrency platform providers to refrain from soliciting Nigerian citizens.

What does this mean for the firm? Let’s dive in.

A Reiterated Warning

This recent notice from the SEC reaffirmed a warning that was initially issued on June 9, which mentioned a company named Binance Nigeria Ltd. It is essential to note that Binance itself clarified that it has no affiliation with this entity. Despite this, the SEC specifically referred to Binance’s website in its concerns.

“The commission again reiterates that the activities of Binance, https://www.binance.com and any such other platform through which the company solicits investors is neither registered nor regulated by the commission and its operations in Nigeria are therefore illegal”

The SEC has consistently classified all cryptocurrencies as securities. While Nigeria has been reviewing crypto exchange applications for registration on a trial basis, the final approval for registration hinges upon an agreement with the central bank. The central bank has previously imposed restrictions on local financial institutions from engaging with crypto service providers.

Cautionary Words from the SEC

In a broader context, the SEC warned the public to exercise caution when investing in crypto assets or dealing with entities that are not registered or regulated by the commission. The circular clearly directed all platform providers involved in such activities to immediately cease reaching out to Nigerian investors through any means.

For potential investors in Nigeria’s crypto market, it is crucial to stay informed about regulatory developments and diligently verify the legitimacy of the platforms they interact with. This will help ensure a safer investment environment and protect investors from potential scams.

Binance in Dubai

On a different note, Binance made an exciting announcement on Monday, revealing that it had obtained a license to operate in Dubai. This milestone came after the company had previously received a Minimal Viable Product (MVP) license from Dubai’s Virtual Assets Regulatory Authority (VARA) in September 2022.

The initial MVP license granted Binance the ability to establish a domestic bank account to securely hold clients’ funds locally, conduct crypto exchange operations, and provide payment and custody services. Having fulfilled all the necessary pre-conditions, Binance has now successfully obtained the official license to continue its operations in Dubai.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.