The Nigerian unit of crypto exchange Binance has been directed to immediately cease its "illegal" operations in the country, according to a circular by the Securities and Exchange Commission.
The directive against Binance Nigeria Limited, the crypto exchange platform's local unit, which is alleged to be "neither registered nor regulated by the Commission", follows U.S. SEC allegations that the exchange had violated federal securities laws.
"Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal," the Nigerian SEC's notice said on its website on Friday.
This is a sad day for crypto holders in Nigeria who account for 40.5% of crypto holders among the countries in Africa, according to a report by the Policy Center for the New South (PCNS) released in December 2022.
Binance was registered in Nigeria in December 2019 based on Techloy's research and has been operating in the country ever since. As far as we know, this directive is the first action to be taken by the country's securities regulator against a major crypto exchange platform and appears to be in response to the recent regulatory issues facing Binance in the U.S., Canada, the Netherlands, and other markets.
In 2021, CEO Changpeng Zhao said that the crypto exchange planned to set up regional headquarters across the world and be recognised by local regulators, as it aims to create a sustainable ecosystem around blockchain technology, amid intense regulatory scrutiny.
One wonders why the company has failed to become registered or regulated by the Nigerian securities regulator, or the Dutch market where it was fined $3.4 million in July 2022 by the Dutch central bank for operating illegally in the country.
It would be interesting to see how Binance responds to this development and the impact the news would have on Binance users in Nigeria.