In a significant development, the Nigerian government has officially prohibited the operations of Binance Nigeria Limited, a prominent cryptocurrency exchange.
This announcement came to light through a circular issued by the Securities and Exchange Commission, which explicitly instructed Binance to cease all activities involving the solicitation of Nigerian investors.
According to the circular, the Securities and Exchange Commission clarified that Binance Nigeria Limited is operating illegally in Nigeria as it lacks registration and regulation by the Commission. It further emphasized the risks associated with investing in crypto-assets and related financial products or services offered by unregistered or unregulated platforms.
The circular also cautioned Nigerian investors about the high-risk nature of crypto-assets, warning that investments in such assets may lead to complete loss.
In addition to the ban on Binance Nigeria Limited, the Securities and Exchange Commission pledged to provide updates on further regulatory measures regarding the activities of Binance Nigeria Limited and similar platforms. It also expressed its intent to collaborate with other regulatory bodies within Nigeria to provide additional guidance on this matter.
Furthermore, the circular emphasized the need for global financial entities, particularly those operating through online platforms and social media, to comply with registration requirements, establish a physical presence, maintain call centers, and fulfill tax obligations when engaging with the Nigerian market.
Changpeng Zhao, also known as CZ, a Chinese-born Canadian businessman, investor, and software engineer, is the co-founder and CEO of Binance. Binance has rapidly emerged as the world’s largest cryptocurrency exchange, capturing over 50% of the market and amassing a user base of more than 120 million individuals. Although Binance’s financial data remains undisclosed, Bloomberg estimates its annual revenue to be approximately $12 billion as of April 5, 2023.