Nigeria’s Regulator Orders Crypto Exchange Binance to Halt its Operations
Binance is one of the biggest cryptocurrency exchanges in the world. Recently, the crypto sector has been shocked by the news of the Securities and Exchange Commission of the United States launching 13 counts of legal violations on Binance.US.
However, it seems that the trouble for the Binance exchange has continued to brew in international jurisdictions as well. Recently, the Securities and Exchange Commission of Nigeria has ordered Binance to cease operations within their jurisdiction.
The regulators have declared Binance as an illegal entity in the region. Furthermore, the regulatory agency of the West African nation has maintained that Binance exchange is not a registered institution in the country.
Meanwhile, the Nigerian iteration of SEC has claimed that anyone who has been conducting trades on the Binance exchange is doing so at their peril.
Central Bank of Nigeria Asks Local Banks to Stop Dealing with Crypto
The stringent stance towards cryptocurrency is not new for Nigerian regulators. Back in 2021, the Central Bank of Nigeria imposed a ban on regional banking enterprises and private financial institutions from dealing with cryptocurrencies.
To this end, private firms and banks are barred from processing cryptocurrency transactions. Regardless of the government-imposed bans, Nigeria has the highest trading volume for digital assets for peer-to-peer exchanges second only to the USA.
On the other hand, the securities regulator of Nigeria has also issued a warning for consumers that digital assets are high-risk assets. Additionally, the firm has also warned investors that investing in cryptocurrencies can wipe out their entire investment portfolios.
All the while, the regulatory agency has directed Binance to stop offering crypto trading services under its jurisdiction. At the same time, Binance is also facing a threat of a lawsuit from the Nigerian SEC in addition to similar exchange platforms in the region.
The current stance of the SEC seems harsh but the regulatory agency has been committed to finding regulatory grounds rather than imposing a ban on the crypto sector. Last year, Nigerian securities exchange officials published a draft for crypto-related guidelines and their legal usage.
By the decree of this document, the regulators also made provisions for tokenized coin offerings that are backed by equity, debt, and property. However, these tokenized coin offerings were not to be backed by cryptocurrencies and were limited to regulated exchanges.
The timing of regulatory action from the Nigerian SEC against Binance coincides with the American SEC lawsuit. The lawsuit against Binance exchange is expanded on various aspects and it contains charges such as securities act violation, wash trading, subsidiaries fraud, and unlawful collation between Binance.US and Binance.com, among others.
Binance reported a net outflow of $392 million on Saturday. However, Binance CEO CZ explained that the firm processed $7 billion in withdrawals in November on account of sharp price changes in the crypto market.
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