The Securities and Exchange Commission (SEC) Nigeria has declared the activities of Binance cryptocurrency exchange firm in Nigeria as illegal and therefore urged the investing public to discontinue transactions or investment deals with the firm in any form.
The commission, in a circular dated June 09, 2023, cautioned that any Nigerian trading on Binance Nigeria Limited, a subsidiary of the well-known global cryptocurrency exchange Binance, was doing so at his or her own risk.
It stated: “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”, the SEC added.
The SEC stressed that “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.
“The Commission therefore warned Nigerian investors 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 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 added.
Meanwhile, the U.S Securities and Exchange Commission took legal action against Binance and Coinbase early last week foe alleged violations of the investment law.
Specifically, the U.S regulator on Monday filed a lawsuit against Binance, alleging major violations, particularly those related to trading unregistered securities in an illegal manner while on the following day, the SEC accused Coinbase of operating without a licence, making it an illegal exchange.
Consequently, the two cryptocurrency exchanges suffered significant outflows as investors reacted to concerns about regulatory issues and liquidity.
However, Binance denied the SEC allegations and claimed that its litigation would ‘undermine America’s role as a global hub for financial innovation and leadership’.
