Nigerian Regulator Declares Local Binance Operations As ‘Illegal’

In a significant move, Nigeria’s market regulator has issued a directive to suspend the operations of Binance, the largest cryptocurrency exchange globally, within the country. The regulator stated that the exchange’s local unit, which had been attracting Nigerian investors through its website, was operating illegally. Binance and its affiliated companies continue to find themselves in increasingly troubled waters, as they grapple with a series of challenges following the recent lawsuit filed by the US Securities and Exchange Commission (SEC). The lawsuit has brought about significant legal and regulatory difficulties for the cryptocurrency exchange and its associated entities. This week, the U.S. Securities and Exchange Commission (SEC) took legal action against both Binance and Coinbase, accusing them of violating its regulations. The SEC filed a lawsuit against the two prominent cryptocurrency exchanges, alleging breaches of the agency’s rules. Last year, Nigeria’s Securities and Exchange Commission (SEC) took a significant step by publishing a comprehensive set of regulations specifically designed for digital assets. This move demonstrated that Africa’s most populous country was actively seeking a balanced approach between an outright ban on cryptocurrencies and their unregulated use. By implementing these regulations, Nigeria aimed to create a regulatory framework that would enable the responsible and secure utilization of crypto assets within the country while addressing potential risks and concerns. In light of recent developments, the SEC issued a warning to Nigerians, cautioning them against engaging with the mentioned entity. Binance has emerged as a prominent cryptocurrency platform in Nigeria, establishing itself as a market leader following the collapse of FTX. In 2022, Binance was in talks with the Nigerian Export Processing Zones Authority (NEPZA) to establish a virtual free zone centred around blockchain and the digital economy. However, with the regulatory challenges faced by Binance and the SEC’s warning, the future of such initiatives remains uncertain. Furthermore, the agency has directed Binance to cease facilitating investments from Nigerian individuals on its platform. It has explicitly warned that regulatory action may be taken against cryptocurrency exchanges, including Binance.

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.

In the midst of these challenges, the Binance.US platform has made a significant decision to transition into a “crypto-only exchange.” As part of this transition, Binance.US has announced its intention to delist all USD trading pairs from its platform by June 13. This move indicates a strategic shift in focus towards catering exclusively to cryptocurrency trading activities. Binance made the decision to exit the Canadian market in May, citing an unfavourable regulatory environment as the reason behind this move. Prior to that, the company had also cancelled its derivatives license with the Australian Securities and Investments Commission (ASIC). The Australian financial regulator had raised concerns and initiated a review of Binance’s compliance with local laws.