Nigeria’s financial regulator, the Securities and Exchange Commission (SEC), has instructed Binance to stop its services in the country, stating that the exchange is neither registered nor regulated. In a circular issued on June 10, the SEC deemed Binance’s operations in Nigeria illegal.
The SEC directed Binance Nigeria Limited to “immediately stop soliciting Nigerian investors in any form whatsoever.” It also warned that any member of the investing public dealing with the entity is doing so at their own risk.
Binance Faces Increasing Regulatory Challenges
The Nigerian SEC’s circular comes shortly after the US SEC charged Binance, along with its CEO and Co-founder, Changpeng Zhao, for operating an illegal trading platform, offering unregistered securities, and commingling customers’ funds. The US SEC also sought a court order to freeze Binance.US’s assets.
The Nigerian SEC urged its citizens to be cautious when investing in crypto assets and related financial products and services if the service provider or its platform is not registered or regulated by the commission. It remains to be seen what action the Nigerian regulator will take against Binance Nigeria Limited, but the commission has stated that further regulatory actions regarding the exchange’s activities will be provided.
Nigeria Aims to Protect Investors
As crypto adoption increases in Africa’s most populous country, the Nigerian SEC is taking measures to protect investors. In a Bloomberg report published in May, the commission revealed that it was considering allowing tokenized coin offerings backed by equity, debt, and property, but not crypto, on licensed digital asset exchanges.
However, the Central Bank of Nigeria’s (CBN) attempt to promote the adoption of a central bank digital currency (e-Naira) through cash restrictions was met with street protests in March. The CBN issued guidelines for the e-Naira in 2021, intending to make it legal tender if successful.
Hong Kong Extends Invitation to Coinbase
In contrast, Hong Kong’s legislator has invited Coinbase, another top exchange facing regulatory pressure in the US, to establish operations in the region, according to a post by Johnny Ng, a member of Hong Kong’s Legco. This invitation comes despite the US SEC’s lawsuit against Coinbase for allegedly operating an illegal trading platform and dealing in unregistered securities. The SEC also accuses Coinbase of running a digital asset staking-as-a-service program without the required license.