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Binance must (temporarily) suspend activities in Nigeria

Binance must (temporarily) suspend activities in Nigeria

On June 9, Nigeria’s Securities and Exchange Commission (SEC) issued a circular instructing financial regulator Binance to terminate its services in the country, as the crypto exchange was not registered or regulated. Binance’s activities in Nigeria were deemed illegal by the SEC.

“Binance Nigeria Limited is hereby directed to immediately cease soliciting Nigerian investors in any form,” said SEC, Nigeria. “Any member of the investing public who trades with the entity does so at their own risk.”

Exploit illegal trading platform

Barely a week after the US Securities and Exchange Commission (SEC) indicted Binance, along with CEO and co-founder Changpeng Zhao, for operating an illegal trading platform, offering unregistered securities and soliciting client funds, the Nigerian SEC has issued a circular. In this circular it was announced that Binance had to stop its activities in the country. In addition, the US SEC has filed for a court order to freeze Binance.US assets.

“As the regulator with the legal 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 or its platform is not registered or regulated by the commission,” it added.

While the exact actions of the Nigerian Markets Regulator against Binance Nigeria Limited are yet to be determined, the commission has announced that further regulatory action will be taken regarding the exchange’s operations.

Crypto adoption in Africa is still on the rise

With the increasing adoption of cryptocurrency in Africa’s most populous country, Nigeria’s SEC is taking precautions to protect investors. In a report published by Bloomberg in May, the commission indicated that it was considering allowing tokenized coin offerings, which are backed by equity, debt and ownership, but not crypto, on licensed digital asset exchanges.

However, the attempt by the Central Bank of Nigeria (CBN) to promote the adoption of a central bank digital currency (e-Naira), including the imposition of cash restrictions, sparked street protests in March. In 2021, the CBN issued guidelines for the e-Naira, with the aim of making it legal tender if successful.

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