News reaching our desk says that SEC and Binance are in a brawl of sorts, with the SEC stating that Binance Nigeria is illegal and not registered.
Anyone who has heard and read about crypto is familiar with Binance. The cryptocurrency exchange is a giant in the blockchain space and has thrived for years despite several setbacks. But now, they seem to have gotten into a rut with the SEC (Securities and Exchange Commission). The rumours are that Binance has been banned. So the question is, Was Binance banned in Nigeria? We bring you the real scoop. Go on and get all the details.
Understanding the Binance Situation in Nigeria
On Friday, 9th of June 2023. The SEC released a circular stating that it does not support Binance Nigeria Limited soliciting investments from the public.
The Commission emphasized that Binance Nigeria Limited is not registered or regulated by them. Therefore, the firm should refrain from engaging the investing public in any activities that involve pooling public funds.
“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 dealing with the entity is doing so at his/her own risk.” Said the Commission.
In a surprising clap back. Binance released a statement denying any affiliations with Binance Nigeria Limited. The subsidiary was supposed to be an arbitrage investment setup. However, the plan fell through, and the subsidiary has been inactive since 2019.
The situation appears dire as Binance and Binance US face a 13-charge lawsuit from the US SEC for unregistered securities operations.
Despite Binance US being established in 2019 to comply with US regulations. The US is suing Binance for enabling citizens to trade on Binance.com, which operates outside US regulations.
With the statement released by the exchange, Binance Nigeria appears to stand alone as Binance faces legal action in the US.
Update
On the 18th of June, Binance founder and CEO Chaopeng Zhao made a tweet calling Binance Nigeria Limited a “scammer” entity, still maintaining the company’s position of not being affiliated with the supposed Nigerian subsidiary.
What does this mean for Nigerian Traders and Investors?
By inference and deduction, crypto investors in Nigeria may be tempted to pull out their holdings from Binance to avoid confusion and what appears to be an imminent shutdown by the US.
The trading community in Nigeria has been sensitised and will henceforth be wary as they watch the Binance Nigeria Limited-SEC saga unravel. Meanwhile, trading activities in the country may plummet due to these recent developments.
Legal and Regulatory Concerns On The Binance Ban in Nigeria
Is cryptocurrency legal in Nigeria? There is no definite answer, as the CBN declared and instructed commercial banks to desist from cryptocurrency transactions. But there was no ban on crypto use and activity. In fact, there has been a proliferation of cryptocurrency exchanges across the country and growing interest among the young demographic. In 2020, the Nigeria SEC issued a statement on digital assets, their classifications and how they should be treated. In this public statement, the SEC clarified that exchanges and digital assets managed by these exchanges would be regulated. The SEC also revealed a few things concerning cryptocurrency regulations in Nigeria in 2022.
What do all these imply?
- SEC is the regulatory body for all cryptocurrency activity as it relates to the management of investor funds from the public.
- The regulated digital assets include cryptocurrencies, initial coin offerings, and other blockchain-based offers of digital assets within Nigeria.
You can find the full details of the elements encapsulated in the regulation on the official SEC website.
Effect of the Regulations on The Crypto Industry in Nigeria.
The regulations put in place by the SEC are not harmful to the operations of cryptocurrency exchanges and brokers in Nigeria. These institutions must only be registered and provide a record of their dealings and offerings. One could say that the Binance ban in Nigeria is the result of flouted orders.
Seeing as Binance is receiving a backlash from both the US and Nigeria SEC, trading volume in Nigeria may plummet for some time. Most Nigerians will also transfer their crypto to other exchanges or a decentralised wallet for safety purposes.
Other exchanges will also be wary as this development could mean all exchanges will be dealt a sterner hand by the SEC.
Alternatives For Nigerian Traders
While the spotlight currently rests on Binance for issues with regulations, other crypto exchanges are available in Nigeria. These are some of the exchanges Nigerians can use.
Let’s briefly take a look at the features of these three exchanges
| Prestmit | Paxful | Quidax | |
| Features | – Offers crypto on/off ramp services.
– Bitcoin, Tether, Litecoins & Dogecoin are available. – Multiple payment options |
– Features P2P trading.
– Gives users a free digital wallet. – Built-in escrow to ensure trade satisfaction between parties. – Allows payment via multiple payment methods |
– Instant crypto trades.
– Multiple payment options. – Supports many cryptocurrencies |
| Benefits | – Ease of use.
– Speedy transactions. – Low transaction fees – High security |
– High security
– Speedy transactions – Ease of use |
– Great customer.
– Fast transactions. – High security.
|
Tips For Choosing the Right Exchange For Nigerian Traders
- Security
- Liquidity
- Ease of use
- Cryptocurrency support
- Adherence to Regulations
Future Outlook of Binance
Looking at the situation with Binance, the future seems uncertain for the global crypto exchange. However, since the SEC requires registering all digital assets exchange platforms, Binance can be adequately set up. Although the larger body has denied affiliations with Binance Nigeria, it may be difficult for a subsidiary body to be established. Nigerian investors may hesitate to embrace it even if it is set up.
FAQs on The Binance Ban in Nigeria
Q: Is Binance banned in Nigeria?
A: The SEC has banned all crypto exchange Binance Nigeria Limited activities because it is not registered and regulated. In a circular released on the regulatory body’s website, Nigerians were advised to stop every transaction with the exchange or do so at their own risk. The Commission has instructed Binance to refrain from asking the public to invest.
Q: Is Binance still available in Nigeria?
A: Nigerians can access the platform but now do so at their own risk. Currently, no subsidiary follows the regulations in Nigeria.
Q: Why did Nigeria ban Binance?
A: The SEC banned Binance Nigeria Limited because it is not registered with the Commission and has not submitted to its regulations.
Final Thoughts
The SEC and Binance Nigeria Limited are at loggerheads, but the latter seems to be in the wrong, as Binance has denied having affiliations with the Nigerian exchange. This development has sent shockwaves down Nigeria’s crypto community’s spine. While we continue to watch the brawl unravel, the SEC advises every crypto holder to continue crypto transactions using other licensed platforms.
