Binance operates an independent entity called Binance Nigeria Limited similar to the US entity which was also found to be illegal early last week.
Cryptocurrency exchanges around the world have found themselves at odds with several global regulators for offering digital assets without proper records. In the latest developments, the Nigerian and US Securities and Exchange Commission (SEC) have stepped up the crackdown on unregistered crypto exchanges. It would appear that Binance Nigeria operated a crypto exchange without the proper regulatory approvals required for securities.
This comes after the Nigerian Central Bank individually tried to ban crypto assets to ensure the success of the digital Naira. Additionally, the Nigerian SEC noted that all crypto assets are unregistered securities.
However, Nigerians are using crypto assets heavily to hedge against rising inflation. For example, Bitcoin prices on Nigeria-based crypto exchanges are often double standard prices as demand exceeds local supply.
Notably, the announcement from the Nigerian Securities and Exchange Commission has increased the overall selling pressure for BNB over the past few days. According to the latest Crypto Price Oracles, BNB has traded around $227, down more than 25% in the past seven days.
What next for Binance Nigeria
It can be said that the adoption of crypto assets in Nigeria is critical for the financial growth of West African countries. Moreover, out of 220 million people in Nigeria, young people under the age of 35 are the most and least supported. As a result, crypto exchanges have been widely used as a digital banking system, threatening the traditional banking industry.
According to the Nigerian SEC, Binance Nigeria should immediately stop soliciting local investors to trade digital assets. Likewise, the regulator has warned local investors that they lack the necessary protection once they invest in crypto assets and they could lose their entire investments.
“Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal. Any member of the investing public who deals with the entity does so at their own risk,” the Commission said. noted.
Notably, global company Binance Holding Limited nor CEO Changpeng Zhao (CZ) were not mentioned in the announcement, suggesting that crypto investors can tap into the investment exchange.
— Binance Nigeria (@binance_naija) June 10, 2023
Nonetheless, the Nigerian SEC is committed to regulating all crypto exchanges with the help of other regulatory agencies in the country. Additionally, new President Bola Tinubu has taken over a struggling economy with extremely high unemployment among other financial constraints. The 71-year-old president has opposed digital assets to restore the use of the naira both physically and digitally.
“The Commission will provide updates on new regulatory measures relating to the activities of Binance Nigeria Limited and other similar platforms and will work with other regulators in Nigeria to provide additional guidance in this regard,” the statement concluded. ‘announcement.
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