Crypto Misfortune Deepens After SEC Bans Binance

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The Securities and Exchange Commission has declared Binance’s operations in Nigeria illegal, which could further worsen access to cryptocurrency for many Nigerians.

This is according to a circular posted on the commission’s website dated June 9, 2023. The commission said that Binance is not registered or regulated by it and that its operations in the country are illegal.

He noted that anyone doing business on the exchange does so at their own risk. He said: 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 platforms.

Binance Nigeria Limited is neither registered nor regulated by the Commission and therefore its operations in Nigeria are illegal. Any member of the investing public dealing with the entity does so at their own risk.

The commission further urged Nigerians to be wary of investing in crypto-assets and crypto-asset related financial products and services if the service provider/platform is not registered or regulated by it. .

He added that Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in the total loss of their investment.

This circular directs Binance Nigeria Limited to immediately cease soliciting Nigerian investors in any form.

The SEC also said that it will provide updates on new regulatory measures regarding the activities of Binance Nigeria Limited and other similar platforms and that it is prepared to work with other regulators in the country to provide further guidance on this.

Binance is the largest crypto platform in the world and has been embroiled in numerous regulatory battles around the world.

On Monday, the United States Securities and Exchange Commission filed a complaint against Binance for violating US rules. On Thursday, Binance US announced that it was suspending US dollar deposits and withdrawals following the enforcement of measures taken by the US SEC.

Binance said: In an effort to protect our customers and our platform, we are suspending USD deposits today and informing customers that our banking partners are preparing to suspend fiat (USD) withdrawal channels as of June 13, 2023. We encourage customers to take action with their USD.

This SEC move is expected to disrupt the crypto market, especially following recent issues with other popular crypto platforms such as Paxful. Paxful, another major crypto platform, in April 2023 shut down operations due to regulatory challenges and key personnel departures.

According to the founder and coordinator of the Blockchain Nigeria User Group, Chimezie Chuta, this SEC decision is unlikely to bother crypto users. He said that no exchanges are currently allowed in the country and as such the crypto market will continue to operate, undisturbed.

He told The PUNCH that the SEC is simply trying to sound the alarm in response to the FIRS’ decision to start taxing crypto.

None of the exchanges are licensed to operate in Nigeria. Legitimacy is another issue though. But people frequent them. The problem is that if someone has problems with the platforms, you cannot legally seek redress. If you have a problem with Binance for example, you cannot sue them.

I don’t see this affecting traders because they already know about it. Anyone not in the know is probably new to space. Binance is registered as a technology company in the country, but since the SEC is the entity that regulates the capital market, it is supposed to issue licenses for the exchanges to operate.

He noted that to be licensed, platforms must have a bank account. But this is impossible due to the Central Bank of Nigeria banning crypto from the formal financial system.

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