Nigeria’s Securities and Exchange Commission (SEC) has ordered the world’s largest cryptocurrency exchange, Binance, to cease its operations in the country.
The SEC states that Binance Nigeria Limited, which attracted Nigerian investors through its website, is operating illegally. This development follows the recent lawsuits filed by the U.S. Securities and Exchange Commission against both Binance and Coinbase for alleged rule violations.
SEC Directs Immediate Halt to Binance Solicitation of Nigerian Investors
The SEC’s directive, dated June 9, explicitly instructs Binance Nigeria Limited to cease all forms of solicitation aimed at Nigerian investors.
Moreover, the commission emphasises that the company lacks registration and regulation, thereby rendering its activities illegal. Binance has not yet issued a response to the SEC’s order.
In addition to Nigeria’s regulatory actions, the U.S. Securities and Exchange Commission has separately filed lawsuits against both Binance and Coinbase. These legal actions accuse the exchanges of breaching regulatory rules, further highlighting the intensified scrutiny faced by major cryptocurrency platforms.
Nigeria’s Regulatory Landscape for Digital Assets
In an effort to navigate the digital asset landscape, Nigeria’s SEC established a regulatory framework for cryptocurrencies last year. This framework aimed to strike a balance between an outright ban on cryptocurrencies and unregulated use.
The move followed the Central Bank of Nigeria’s prohibition in 2021, which banned banks and financial institutions from engaging in or facilitating transactions involving digital currencies.
Despite the restrictions imposed by traditional financial sector regulations, Nigeria’s tech-savvy youth have enthusiastically adopted cryptocurrencies. They have turned to peer-to-peer trading platforms provided by crypto exchanges to bypass the limitations placed by the financial sector ban.
Nigeria’s Declaration of Binance Operations as Illegal
The regulatory authority in Nigeria has declared Binance’s local operations illegal and ordered the exchange to halt its activities. The actions of both the Nigerian SEC and the U.S. SEC reflect a growing global focus on regulating the cryptocurrency industry.
Meanwhile, Nigeria continues to grapple with finding a balance between enabling crypto adoption and addressing regulatory concerns.