The SEC clarified that it has no authority to regulate or authorize Binance Nigeria, making its operations in the country unlawful.
The SEC, as the primary regulatory body for investor protection, emphasized the risks associated with using unregistered platforms like Binance Nigeria.
It advised investors to exercise caution when dealing with digital assets and related financial products and services. The U.S. Securities and Exchange Commission filed a complaint against Binance, accusing the cryptocurrency exchange of failing to register as a broker or exchange.
This prompted the Nigerian SEC to take action. The case also alleged that Binance conducted public offers and sales of unregistered securities. These legal challenges are putting pressure on Binance, which currently holds the highest market value among cryptocurrency exchanges.
Investor protection and compliance
In an attempt to strike a balance between outright prohibition and unregulated usage of crypto-assets, Nigeria’s SEC introduced regulations for digital assets last year.
However this came after the central bank of Nigeria prohibited banks and financial institutions from facilitating transactions involving virtual currencies in 2021.
Despite these limitations, young Nigerians have embraced cryptocurrencies. They used peer-to-peer trading platforms provided by cryptocurrency exchanges to work around the ban imposed by the traditional financial industry.
As global regulatory oversight of the cryptocurrency industry increases, authorities emphasize ensuring investor protection and compliance. The actions taken by the SEC of Nigeria demonstrate the growing regulatory scrutiny on bitcoin exchanges and their operations.
The outcomes of these legal challenges will impact the future regulation of cryptocurrencies in Nigeria and other countries.
