The country’s markets regulator has taken action against Binance, the largest cryptocurrency exchange globally.
The regulator has ordered Binance to halt its operations within Nigeria, citing the illegality of a local unit that had been actively soliciting Nigerian investors through a website.
Binance, founded in 2017 and headquartered in Malta, has emerged as the world’s leading cryptocurrency exchange platform, serving millions of users globally. However, its operations have faced scrutiny and regulatory challenges in several countries, with Nigeria becoming the latest nation to take action against the exchange.
The Securities and Exchange Commission of Nigeria (SEC) issued the directive to Binance, claiming that the exchange’s local unit was operating without proper authorization.
According to the SEC, Binance failed to obtain the required registration or license to operate within the country, rendering its activities illegal and in violation of Nigerian securities laws.
In a statement issued on June 9th, the Securities and Exchange Commission (SEC) has instructed Binance Nigeria Limited to stop all forms of solicitation targeting Nigerian investors immediately.
The SEC emphasized that the company lacks proper registration and regulation, rendering its activities illegal.
The recent action taken by the Nigerian SEC compounds the challenges faced by Binance, reaching a critical point when the United States initiated a legal case against the prominent cryptocurrency exchange and its associated entities.
Furthermore, the U.S. regulatory body has requested an urgent court order that would enable them to immobilize assets held by Binance U.S., intensifying the predicament for the exchange.
The Nigerian regulator swiftly made their announcement within a span of fewer than 24 hours following the decision by Binance’s troubled U.S. affiliate to temporarily halt dollar deposits and withdrawals.
In the previous year, Nigeria’s Securities and Exchange Commission (SEC) introduced a comprehensive set of regulations pertaining to digital assets. This development highlighted the efforts of Africa’s most populous nation to strike a balance between an absolute prohibition of crypto assets and their unregulated use.
Following the prohibition by Nigeria’s central bank in 2021, banks and financial institutions were prohibited from engaging in or enabling transactions involving digital currencies.
In addition to denouncing the affiliate’s operations as unlawful, the Commission issued a cautionary statement to Nigerians regarding the risks associated with investing in crypto assets or related products, especially when the service provider lacks registration or regulation by the SEC. Furthermore, the regulatory body reiterated its steadfast stance against investing in an asset class deemed as “extremely risky.”
The Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) expressed their approval of the recent decision by the Nigerian Securities and Exchange Commission (SEC).
SIBAN acknowledges that the SEC’s decision reflects their vigilance in monitoring the market and their commitment to establishing appropriate regulations for the industry.
SIBAN welcomes this proactive approach by the SEC, as it demonstrates a sincere interest in fostering a well-regulated and secure market environment for blockchain and cryptocurrency activities in Nigeria.
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