Binance’s troubles across the world continued this week as the operations of the largest cryptocurrency exchange in the world have been declared illegal in Nigeria. The nation’s Securities and Exchange Commission made this declaration in the early hours of Saturday morning.
According to a statement published on its website, the SEC claimed Binance Nigeria Limited, a subsidiary of the well-known global cryptocurrency exchange Binance, has been actively promoting its web and mobile-enabled platforms to the Nigerian public whereas, Binance Nigeria is not registered or regulated by the SEC, making its operations in Nigeria illegal.
The statement signed by the SEC’s management read thus: “The attention of the Securities and Exchange Commission (the Commission) has 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.
As the regulator with the statutory mandate of investor protection, the Commission urges 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 a 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 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.
It is noteworthy that this comes after Nigeria passed a 10% tax on digital assets in its new Finance Act for the year 2023.
Binance had signed a partnership with Nigeria
In September 2022, Bloomberg reported that Nigerian authorities and cryptocurrencies platform Binance Holdings Ltd. were in talks to establish a digital economic zone that will help entrepreneurs fast-track blockchain technology in the West African nation.
Nigerian officials partnered up with prominent global crypto exchange Binance to construct the Export Processing Zone Authority (NEPZA). Although crypto enthusiasts welcomed the development in the country, it is still unclear what exactly it is out to do and what effects it will have on the everyday Nigerian.
However, Emmanuel Ebanehita, Marketing Director (West Africa) at Binance told Technext in a Crypto interview that “As we continue to support blockchain adoption across the African continent, Binance’s collaboration with The Nigeria Export Processing Zones Authority was set up to establish a virtual free zone to generate long-term economic growth through digital innovation in the region.
In that interview, he also admitted that the company cannot do much about the regulatory decisions that government makes. He said “Although we have no power over the regulatory decisions that these governments make, partnering and creating an open dialogue with governments and regulatory bodies continue to prove instrumental in developing appropriate regulatory frameworks in the respective countries.
However, the company is always open to having dialogues with policymakers to do what is necessary for blockchain adoption in their respective countries
We prioritise creating a dialogue with governments in order to assist them in actively keeping abreast of ever-changing developments in the crypto industry, the potential of crypto in developing the local economy and best practices for safe, smart, regulation in the industry.”
Similarly, Binance Government Affairs Lead, Tola Odeyemi told Technext earlier this year that the company was open to working with the newly elected policymakers to foster crypto adoption in Nigeria.
In that interview, she responded to the allegations that Binance’s partnership with the NEPZA was a violation of the CBN directive that banned crypto transactions. However, Tola said all she can see from it is interest.
“You don’t address something that you’re not interested in. So what it shows to me is an increased interest with engaging and understanding blockchain technology, either through virtual zones, through regulations, through CBDCs. Again, all we can do is prioritize that dialogue with governments to assist them in keeping abreast of developments in the crypto industry.”
What next for Binance
Binance has already suspended withdrawal in the US as its troubles with the regulatory bodies in that nation mount. It remains to be seen how Binance Nigeria would react to this latest development.
The cryptocurrency ec]exchange can only continue to hold dialogues with the policymakers and hope that its investment in the nation does not go to waste and that its aspirations to foster crypto adoption in the country can be actualised.
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