Nigerian Securities Commission Issues Warning Against Binance's Unlicensed Operations

The Nigerian Securities and Exchange Commission (SEC) has issued a stern warning to local investors, cautioning them against using Binance, one of the world's largest cryptocurrency exchanges. This warning comes as a response to a previous circular issued against a fraudulent company that illegitimately operated under the Binance brand.

On July 28, the SEC released a statement advising investors not to engage with Binance due to the absence of a valid license for operations in Nigeria. As a result, the SEC deems Binance's activities in the country to be illegal. The commission also emphasized the substantial risks associated with investing in cryptocurrencies, stressing the potential for significant financial losses and reminding the public that any engagement with the entity is done at one's own risk.

This is not the first time the SEC has taken action against Binance. In June, the commission published a similar circular that restricted the activities of Binance Nigeria, a fraudulent entity falsely claiming affiliation with the legitimate Binance exchange. In response, Binance issued a cease and desist notice to Binance Nigeria.

It's important to note that Nigeria has maintained a cautious stance towards the cryptocurrency industry, despite its efforts to promote the central bank digital currency (CBDC) known as the eNaira, launched in 2021. However, adoption rates of the eNaira have fallen below expectations, prompting the central bank to explore measures to boost its usage. In July, the CBDC system was upgraded with near-field communication technology to enable more convenient and secure contactless payments.

Additionally, as of May 2023, Nigeria has implemented a 10% tax on gains from the sale of digital assets, including cryptocurrencies. This measure faced criticism from local stakeholders as being "premature."

Cointelegraph attempted to obtain further commentary from Binance regarding the SEC notice, but no additional statements have been provided at this time. The SEC insists that both Binance and other unregistered platforms immediately cease their services in Nigeria. The regulatory body is determined to protect local investors and uphold the legality of financial activities within the country's borders.