Binance Faces Regulatory Hurdles in Nigeria Due to Its Crypto Activity

by Nik Asti

Published: June 12, 2023 at 10:00 am Updated: June 12, 2023 at 6:42 am

by William Savage

Edited and fact-checked: June 12, 2023 at 10:00 am

In Brief

Binance, a major cryptocurrency exchange in Nigeria, has been ordered to cease operations by the country’s Securities and Exchange Commission.

The Securities and Exchange Commission (SEC) in Nigeria has directed Binance, the world’s leading cryptocurrency exchange in terms of trading volume, to halt its operations within the country. The regulator deemed Binance’s operations as “illegal,” indicating that the exchange had acquired no registration or regulation from the commission.

Binance Faces Regulatory Hurdles in Nigeria due to its Crypto Activity

The SEC issued a stern warning to investors, suggesting that any individual engaging with Binance would do so at their own risk. In 2021, the Central Bank of Nigeria had already prohibited banks and financial institutions from processing transactions involving digital currencies. Despite the ban, Nigerians make up a large portion of crypto transactions on peer-to-peer platforms outside the United States.

The Nigerian SEC ordered Binance to stop seeking investments from Nigerians. So, they also threatened more regulatory actions against similar exchanges. Nigeria’s SEC set rules for digital assets last year. This was an attempt to balance a total crypto ban and unregulated use.

SEC against Binance

This regulatory order from Nigeria follows closely on the heels of a legal action by the US SEC against Binance. The American regulator has filed lawsuits against the exchange, alleging illegal operation of a securities exchange. Thirteen charges were brought against Binance, including operating an unregistered exchange and offering unregistered securities to the public.

While under growing regulatory pressure, Binance has not experienced significant outflows. CEO Changpeng Zhao revealed in a tweet that the platform had seen a net outflow of roughly $392 million in the past 24 hours, despite major price movements.

The US Securities and Exchange Commission has filed a lawsuit against Binance and its CEO, Changpeng “CZ” Zhao, for allegedly disregarding US securities laws. The complaint alleges that Binance and Zhao enriched themselves by billions of dollars.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti