The Securities and Exchange Commission (SEC) has issued a circular directing the Nigerian unit of cryptocurrency exchange Binance to immediately halt its “illegal” operations within the country. The SEC alleges that Binance Nigeria Limited, the local unit of the exchange platform, is neither registered nor regulated by the Commission, citing violations of federal securities laws similar to those claimed by the U.S. SEC.
According to an announcement on the Nigerian SEC’s website, “Binance Nigeria Limited is neither registered nor regulated by the Commission, and its operations in Nigeria are therefore considered illegal.” This development is disheartening for cryptocurrency holders in Nigeria, who make up 40.5% of crypto holders among African countries, as reported by the Policy Center for the New South (PCNS) in December 2022.
Binance registered in Nigeria in December 2019, according to Gurustab research, and has been conducting operations in the country since then. This directive from the Nigerian securities regulator marks the first significant action taken against a major crypto exchange platform in the country. It appears to be a response to the recent regulatory challenges faced by Binance in the United States, Canada, the Netherlands, and other markets.
In 2021, Binance CEO Changpeng Zhao expressed the exchange’s intention to establish regional headquarters worldwide and obtain recognition from local regulators. The aim was to foster a sustainable ecosystem around blockchain technology despite heightened regulatory scrutiny.
It raises questions as to why Binance has failed to become registered or regulated by the Nigerian securities regulator, as well as the Dutch market where it was fined $3.4 million in July 2022 by the Dutch central bank for operating illegally.
It remains to be seen how Binance will respond to this development and the impact it will have on its users in Nigeria.