The Securities and Exchange Commission (SEC) in Nigeria has ordered Binance Nigeria Limited to stop all operations immediately as it is neither registered nor regulated. In a circular released on Friday, the SEC stated that the operations of Binance Nigeria Limited in Nigeria are illegal and investors should be wary of investing in crypto-assets. This move by the Nigerian SEC comes just days after the US SEC filed a lawsuit against Binance and its founder, CZ, for violating securities laws in the US.
Binance Nigeria is the second Binance branch to be accused of operating unlicensed activities. Binance’s US affiliate was also sued by the US SEC, which requested the assets of Binance.US to be frozen. The US SEC is currently searching for an alternative way to serve Changpeng Zhao with the court summons.
It is worth noting that the Nigerian SEC had previously stated that it views all crypto assets as securities by default, and in May, Bloomberg reported that the SEC was processing registration applications from crypto firms on a trial basis. However, it would not begin doing so formally until it had reached an agreement with the nation’s central bank. Currently, it is against the law for banks in Nigeria to provide services to cryptocurrency platforms.
Investing in crypto-assets is becoming riskier due to regulatory interventions such as these. While it is true that decentralization remains one of the significant features of cryptocurrencies, it is also essential for security in the market to develop. The fact that Binance, one of the largest cryptocurrency exchanges in the world, is facing legal action in two different jurisdictions underscores the need for cryptocurrency platforms to put more efforts into regulatory compliance.