On July 28, 2023, the Securities and Exchange Commission (SEC) of Nigeria issued a circular reiterating its earlier warning against investing in crypto assets through Binance, the popular major cryptocurrency exchange platform.
The circular emphasizes that Binance and similar platforms are not registered or regulated by the Commission, rendering their operations in Nigeria illegal. As the statutory regulator for investor protection, the SEC highlights the high risks associated with investing in crypto-assets and urges the public to exercise caution while dealing with unregulated entities.
The circular is a continuation of the Commission's efforts to safeguard Nigerian investors from potential risks in the cryptocurrency market. It references a prior circular issued on June 9, 2023, which already brought attention to the unauthorized operations of Binance in Nigeria. Despite the initial warning, the Commission found it necessary to reiterate the message and issue further directives to address the ongoing solicitation of Nigerian investors by Binance and other similar platforms.
It is worth mentioning that this topic has been a subject of debate on social media within the crypto industry, particularly on Twitter (today, X). However, even the CEO of the multinational Binance, CZ, considered it to be FUD (Fear, Uncertainty, Doubt), claiming that the company referred to by the regulatory body was actually Binance Nigeria Limited, and that he and his team had taken measures to have the entity in question prosecuted.
But the recent circular clarifies this misunderstanding and reiterates that the entity in question is indeed Binance.com. The circular appeals to the company to also stop soliciting Nigerian investors to invest with their platform. The SEC Nigeria deems Binance, as well as other crypto entities operating under its jurisdiction, to be illegal and unregistered with the Nigerian Securities and Exchange Commission.
Furthermore, all platform providers soliciting Nigerian investors on behalf of Binance or similar unauthorized entities are directed to cease such activities immediately. The circular serves as a strong reminder of the Commission's stance against unauthorized investment solicitation.
The circular also emphasizes that all Nigerians who decide to trade with Binance or any other platform operating under its jurisdiction do so at their own risk, and any losses they may incur absolve the SEC of any responsibility.
Therefore, the circular issued by the SEC Nigeria serves as a clear warning to the Nigerian public about the risks associated with investing in cryptocurrencies through unregulated platforms like Binance. As the regulatory authority responsible for investor protection, the Commission aims to safeguard the interests of the investing public and ensure compliance with the law.
Investors are urged to stay informed, exercise caution, and only engage with entities that are registered and authorized by the SEC. The Commission will continue to monitor and take regulatory actions against unregistered operators and collaborate with other regulators to provide further guidance on the matter.
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