Binance Nigeria operates an illegal crypto exchange and should stop soliciting local investors, according to the Nigerian securities regulator.

Cryptocurrency exchanges worldwide have faced opposition from multiple global regulators for offering digital assets without proper registration. Recently, both the Nigerian and United States Securities and Exchange Commission (SEC) have increased efforts to crack down on unregistered crypto exchanges. Binance Nigeria has reportedly been operating a crypto exchange without the necessary regulatory approvals for securities.

This comes after the Nigerian Central Bank attempted several times to ban crypto assets in order to ensure the success of the digital Naira. The Nigerian SEC also noted that all crypto assets are unregistered securities.

However, Nigerians have been using crypto assets en masse to hedge against rising inflation. For instance, Bitcoin prices in Nigeria-based crypto exchanges are often double the standard prices because demand exceeds local supply.

Notably, the announcement by the Nigerian Securities and Exchange Commission has increased the overall sell pressure of BNB in the past few days. According to the latest crypto price oracles, BNB traded around $227, down more than 25 percent in the past seven days.

What’s Next for Binance Nigeria

The adoption of crypto assets in Nigeria is arguably critical for the financial growth of West African nations. Furthermore, out of 220 million people in Nigeria, the youths below the age of 35 are the most and majorly unbanked. As a result, crypto exchanges have significantly been used as a digital banking system, thereby threatening the traditional banking sector.

According to the Nigerian SEC, Binance Nigeria should immediately cease soliciting local investors to trade digital assets. Similarly, the regulator warned local investors that they lack the necessary protection once they invest in crypto assets and could lose all their entire investments.

“Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal. Any member of the investing public dealing with the entity is doing so at his/her own risk,” the Commission noted.

Notably, the global Binance Holding Limited nor Chief Executive Officer (CEO) Changpeng Zhao (CZ) were not mentioned in the announcement, thus suggesting crypto investors can tap into the exchange for investments.

We advise fellow Nigerians to be wary of FUD and fake news as well as be careful of investing in fake exchanges and site posing as Binance Holding Limited. #binance #bnb

— Binance Nigeria (@binance_naija) June 10, 2023

Nonetheless, the Nigerian SEC is committed to regulating all crypto exchanges with the help of other regulatory agencies in the country. Moreover, the new president Bola Tinubu took over a struggling economy with extremely high unemployment among other financial constraints. The 71-year-old president has moved against digital assets to restore the use of the Naira both physically and digitally.

“The Commission shall provide updates on further regulatory actions with respect to the activities of Binance Nigeria Limited, and other similar platforms and shall work with other regulators in Nigeria to provide further guidance on this matter,” the announcement concluded.

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