It has been a tough week for cryptocurrency exchange Binance. On June 9, Nigeria’s securities authority reportedly deemed the exchange illegal, just days after Binance was sued by the U.S. Securities and Exchange Commission.
“Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever,” Nigeria’s Securities and Exchange Commission (SEC) said in a statement seen by Bloomberg.
The regulator also noted that Binance is neither registered nor regulated in the country, making its operations illegal. “Any member of the investing public dealing with the entity is doing so at his or her own risk,” said the commission.
The setback comes just days after Binance was sued by U.S. authorities. The American SEC pressed 13 charges against Binance on June 5, including accusations of unregistered offers and sales of securities, failure to register as an exchange or broker, and commingling of funds. The company said it provided all the information required by regulators and is looking forward “to defending ourselves in court.”
Binance is a popular crypto exchange in Nigeria. It is one of the region’s most prominent crypto hubs and Africa’s most populous country. A study by Chainalysis shows that the Middle East and North Africa region are leading the crypto adoption worldwide, with users receiving $566 billion in cryptocurrencies between July 2021 and June 2022, a 48% increase on the previous year.
The ban follows recent regulatory developments within the local crypto ecosystem. On May 28, former President Muhammadu Buhari signed the Finance Act into law, introducing a 10% tax on gains from digital assets. The newly elected Nigerian president, Bola Tinubu, has recently released a manifesto suggesting a revision of the Nigerian SEC’s regulations on digital assets to make them more business-friendly.
The Central Bank of Nigeria does not recognize cryptocurrencies as legal tender, and commercial banks are banned from engaging with crypto transactions in the country since February 2021.