Nigeria’s SEC Orders Binance To Halt Operations

Nigeria’s Securities and Exchange Commission (SEC) has taken action against Binance, the world’s largest cryptocurrency exchange, ordering the company to cease its operations in the country. The SEC stated that Binance Nigeria Limited, which had been actively soliciting Nigerian investors through its website, was operating illegally as it was not registered or regulated by the commission.

Nigeria's markets regulator has ordered Binance to halt its operations in the country, saying a local unit that courted Nigerian investors through a website was illegal. "Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form…

— Wu Blockchain (@WuBlockchain) June 10, 2023

Binance’s Nigerian Operations

In June 2023, the SEC issued a statement directing Binance Nigeria Limited to immediately halt any form of solicitation targeting Nigerian investors. The regulatory body’s decision comes after Nigeria’s SEC introduced a set of regulations for digital assets last year, indicating the country’s efforts to strike a balance between an outright ban on cryptocurrencies and their unregulated use.

The move by the SEC follows the Nigerian central bank’s ban on banks and financial institutions from engaging in cryptocurrency transactions in 2021. Despite this ban, Nigeria’s tech-savvy and youthful population embraced cryptocurrencies, utilizing peer-to-peer trading platforms provided by crypto exchanges to bypass the restrictions imposed by the financial sector.

Cryptocurrencies have gained significant popularity in Nigeria due to their potential for financial inclusion and the ability to facilitate cross-border transactions. However, concerns over consumer protection, money laundering, and market stability have prompted regulatory bodies to take a closer look at the crypto industry.

The SEC’s directive to halt Binance’s operations in Nigeria is seen as a significant move towards regulating the cryptocurrency market in the country. By ensuring that exchanges are registered and adhere to regulatory guidelines, the SEC aims to protect Nigerian investors and maintain market integrity.

Binance, founded in 2017, has grown to become the largest cryptocurrency exchange globally, providing a wide range of trading services and supporting numerous digital assets. The halt in its operations in Nigeria highlights the challenges faced by crypto exchanges operating in jurisdictions with evolving regulatory frameworks.

It remains to be seen how Binance will respond to the SEC’s order and whether the company will work towards compliance or explore legal options to challenge the decision. In the meantime, Nigerian investors will need to seek alternative platforms for their cryptocurrency trading activities until a resolution is reached between Binance and the regulatory authorities.