Nigeria’s SEC Releases New Guidelines for Crypto Firms Amid Binance Feud

Nigeria’s SEC has published new guidelines to regulate the activities of crypto firms and prevent money laundering and fraud. The move comes as the country is clamping down on crypto exchanges, especially Binance, which faces legal troubles and criticism.

Nigeria’s Securities and Exchange Commission (SEC) has released new guidelines to regulate the operations of crypto firms in the country. The new guidelines aim to curb money laundering and fraud cases involving digital currencies, according to The Daily Post.

The update in the regulatory framework also coincides with the country’s ongoing dispute with Binance, one of the largest crypto exchanges in the world, which is facing scrutiny and challenges in the Nigerian market.

According to The Daily Post, the new rules require virtual asset service providers (VASPs) to obtain a license, register, and undergo inspection by the SEC. The initiative is intended to better regulate the financial markets and protect the capital market from “criminals being registered as operators.”

The SEC defines VASPs as any person or entity that provides services related to digital assets, such as exchange, transfer, storage, or issuance.

Nigeria’s Crypto Crackdown

Nigeria’s new measures come when the country is tightening its grip on the digital asset market, which has seen a surge in popularity and adoption in recent years. Nigeria is one of the top countries in terms of crypto usage, as many Nigerians use digital currencies to hedge against inflation, send remittances, and access global markets.

However, the Nigerian authorities have been wary of the risks and challenges posed by crypto, such as money laundering, terrorism financing, tax evasion, and cybercrime.

In February 2021, the Central Bank of Nigeria (CBN) issued a circular that banned banks and other financial institutions from facilitating crypto transactions. The ban sparked outrage and protests from the crypto community, who argued that it violated their rights and freedoms.

One crypto exchange affected by the ban is Binance, which announced in October 2021 that it would stop offering Nigerian Naira (NGN) services in response to the increased regulatory pressure. Binance, which had previously faced legal issues in Nigeria over alleged fraud and embezzlement, said that it would comply with the local laws and cooperate with the authorities.

However, the exchange also faced a setback when the executives of its Nigerian subsidiary were arrested during a regulatory sweep recently. There were rumors that Binance would face a $10 billion fine, the Nigerian authorities denied any such claims, fueling uncertainty and anxiety about the country’s future stance on crypto.

Binance vs other exchanges

Binance is not the only crypto exchange that the Nigerian regulators have targeted, as other well-known platforms such as Coinbase and Kraken have also faced criticism and mockery.

The Nigerian SEC has accused Coinbase of operating illegally in the country, as it does not have a license or registration. The SEC also warned Nigerians to be wary of Coinbase’s services, as they could expose them to fraud and scams.

On the other hand, Kraken has been ridiculed by the Nigerian SEC for its poor performance and customer service. The SEC claimed that Kraken had failed to meet the expectations of its users, as it had experienced frequent outages, delays, and errors. The regulator also advised Nigerians to avoid using Kraken, as it could result in losses and dissatisfaction.