Nigeria’s Securities and Exchange Commission (SEC) has issued a directive ordering Binance, the world’s largest cryptocurrency exchange, to cease its operations in the country. The regulator declared that Binance Nigeria Limited, which had been attracting Nigerian investors through its website, was operating illegally as it was neither registered nor regulated. This happened days after the crypto exchange was sued by the US SEC.
In a statement, the SEC stated, “Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever.” At present, there has been no official response from Binance regarding this development.
The action taken by Nigeria’s SEC comes in the wake of recent legal challenges faced by Binance and Coinbase from the U.S. Securities and Exchange Commission for alleged rule violations.
In 2020, Nigeria’s SEC introduced regulations for digital assets, indicating the country’s attempt to strike a balance between a complete ban on cryptocurrencies and unregulated usage. This followed the 2021 ban by Nigeria’s central bank, which prohibited banks and financial institutions from engaging in or facilitating transactions involving digital currencies.
Nigeria, with its young and tech-savvy population, has shown significant adoption of cryptocurrencies. Many Nigerians turned to peer-to-peer trading on crypto exchanges as an alternative to bypassing the restrictions imposed by the traditional financial sector.
Binance is a popular crypto exchange in Nigeria. It is one of the region’s most prominent crypto hubs and Africa’s most populous country. A study by Chainalysis shows that the Middle East and North Africa region is leading crypto adoption worldwide, with users receiving $566 billion in cryptocurrencies between July 2021 and June 2022, a 48% increase from the previous year.