According to the reports on June 9, Nigeria’s Securities and Exchange Commission declared Binance as illegal. This announcement was days after the United States Securities and Exchange Commission (SEC) filed a lawsuit against Binance.

The authority figure has directed Binance Nigeria Limited to cease all forms of solicitation of Nigerian investors immediately. The Nigerian SEC pointed out that Binance operates illegally in the country since it is not registered or regulated. It further warned that individuals engaging with the entity assume personal risk.

Just days after U.S. authorities sued Binance, the setback has emerged. On June 5, the SEC filed a lawsuit against Binance, leveling 13 charges. These include accusing the company of making unregistered offers and selling securities, failing to register as an exchange or broker, and mingling funds. 

Binance stated that it furnished all the necessary information to regulators and eagerly anticipated defending itself in court.

Binance, a well-known cryptocurrency exchange, holds significant popularity in Nigeria. The country is not only Africa’s most populous country but also one of the region’s prominent crypto hubs. 

Lagos is the largest city of Nigeria.
Lagos is the largest city of Nigeria.

According to a study conducted by Chainalysis, the Middle East and North Africa region leads in global crypto adoption. Users in this region received a staggering $566 billion in cryptocurrencies between July 2021 and June 2022. This metric indicates a notable 48% increase compared to the previous year.

Nigeria’s ban on crypto activities stems from recent regulatory developments in the local crypto ecosystem. On May 28, former president Muhammadu Buhari enacted the Finance Act, introducing a 10% tax on profits from digital assets. 

Bola Tinubu, the newly elected Nigerian president, has released a manifesto proposing revising the Nigerian SEC’s digital asset regulations to create a more business-friendly environment.

The Central Bank of Nigeria does not recognize cryptocurrencies as legal tender. The Nigerian government has prohibited commercial banks from engaging in crypto transactions since February 2021.

The US SEC Cracks Down on Top Crypto Exchanges

With the ongoing crypto winter, the industry experienced a sudden shock when the US SEC filed lawsuits against Binance and Coinbase, two of the largest global exchanges. 

The SEC had been signaling its intentions to the crypto exchanges, citing concerns about their offering of unregistered securities. The simultaneous lawsuits against these major crypto operators indicate that the regulator is aggressively targeting the crypto industry.

To be more specific, Binance faces allegations of violating securities laws. Specifically, the SEC alleged it of allowing its customers in the US to trade on its platform, despite the uncertain status of crypto as a security. Coinbase, on the other hand, has been charged with engaging in unregulated securities exchange activities within the US securities market.