Binance Regulatory Hurdle In Nigeria – NewsTo
Binance Regulatory Hurdle In Nigeria

Binance Regulatory Hurdle In Nigeria

Nigeria’s Securities and Exchange Commission (SEC) has ordered Binance, the largest cryptocurrency exchange in the world by trading volume, to stop operating in the country. 

The regulator recently ruled Binance’s operations “illegal” in the nation of West Africa, claiming that the cryptocurrency exchange was neither registered nor regulated by the commission.

“Any member of the investing public who deals with the entity does so at his or her own risk,” the commission warned.

Before 2021, the central bank of Nigeria had prohibited banks and other financial organizations from enabling transactions with digital currencies. 

The majority of digital token transactions on peer-to-peer trading platforms outside of the US are still made by citizens of the most populous country in Africa, despite the ban.

Investors were cautioned in the decision by the Nigerian SEC that investing in cryptocurrencies is “extremely risky and may result in total loss of investment.” 

In addition to threatening future regulatory action against the platform and other comparable exchanges operating in the nation, the regulator ordered Binance to stop soliciting investments from Nigerians.

Nigeria’s SEC developed a set of laws for digital assets last year to strike a balance between an outright ban on crypto assets and their unrestricted use.  The regulator had proposed allowing tokenized coin offerings on licensed digital exchanges backed by equity, debt, or property, excluding crypto.

Binance Regulatory Hurdle In Nigeria

Binance Is Subject To Increasing Regulatory Scrutiny

Days after the US SEC filed lawsuits against Binance, alleging that the company was running a securities exchange illegally, the Nigerian SEC issued a new order. 

This Thursday, the SEC filed a lawsuit against Binance and its CEO for their “blatant disregard of the federal securities laws,” outlining 13 allegations against the exchange, including running an unregistered exchange.

The government charged Binance with breaching the law by making unregistered securities, such as its BNB token and BUSD stablecoin, available to the general public. The SEC also charged Binance with failing to register as a broker and exchange. 

According to the SEC, Zhao and Binance were aware that they were using the platform in violation of multiple US laws.

Additionally, the agency claimed that Zhao and Binance established BAM Management and BAM Trading in 2019 “as part of an elaborate scheme to evade” US laws by claiming that the Binance.US platform operated independently and that US users were not allowed to access

In the meanwhile, Binance has not experienced significant outflows despite the increased regulatory attention.

CZ tweeted on Saturday that the site had experienced a net outflow of around $392 million over the previous day.

“On a day of sharp price movement like today, many arbitrage traders transfer a significant amount of funds between exchanges, usually exponentially more than on normal days,” he added, noting that the exchange witnessed $7 billion in withdrawals in one day back in November. 

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