Binance Nigeria Deemed Illegal by Regulator; Directed to Halt Operations

According to an announcement by Nigeria’s Securities and Exchange Commission (SEC), Binance, a leading cryptocurrency exchange, has been deemed illegal in the country and has been instructed to cease soliciting Nigerian investors. The SEC stated on June 9 that Binance was operating unlawfully in Nigeria as it had not registered with or been regulated by the Commission.

The SEC highlighted that Binance had actively encouraged Nigerian citizens to trade crypto assets on its unregistered platforms. Consequently, the exchange is now prohibited from soliciting Nigerian investors in any capacity, and the SEC has issued a warning to Nigerians against engaging with the platform. Binance had established itself as a prominent crypto platform in Nigeria, gaining market leadership after the collapse of FTX. In 2022, Binance was in discussions with the Nigerian Export Processing Zones Authority (NEPZA) to establish a virtual free zone focused on blockchain and the digital economy.

The SEC’s declaration follows several recent pro-crypto initiatives undertaken by Nigeria. In May, the regulatory body announced its approval for the tokenization of assets such as equities, property, and debt. Subsequently, the Nigerian government formally endorsed the use of blockchain technology. Binance has faced growing regulatory pressures in various jurisdictions, including the United States, Canada, and Australia.

In the United States, the Securities and Exchange Commission (SEC) filed a lawsuit on June 5 against Binance, its CEO Changpeng ‘CZ’ Zhao, and its U.S. subsidiary, Binance.US, accusing them of violating federal securities law. In response to the lawsuit, the regulator has frozen Binance U.S.’s assets and issued a court summons to Zhao. Consequently, Binance.US has announced plans to transition into a “crypto-only exchange” and will delist all USD pairs by June 13.

Furthermore, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance in March, alleging violations of regulatory commodity standards. There have been limited updates on this matter from the CFTC since then. Binance has expressed its commitment to cooperating with regulators and plans to defend itself in court.

Binance also withdrew from the Canadian market in May, citing an unfavorable regulatory environment. Prior to that, the exchange had terminated its derivatives license with the Australian Securities and Investments Commission (ASIC). At the time, the financial regulator stated that it was reviewing Binance’s compliance with local laws.