Nigeria’s Securities and Exchange Commission declared the operations of digital-assets exchange Binance Holdings Ltd. illegal in the West African nation, days after the US SEC launched lawsuits against the firm.
Binance Nigeria Limited, the unit of the cryptocurrency platform in Africa’s biggest economy, is neither registered nor regulated by the commission and its operations are therefore “illegal,” the SEC said in a statement posted on its website late Friday. “Any member of the investing public dealing with the entity is doing so at his or her own risk,” the commission warned.
While lenders in Nigeria are banned from processing cryptocurrency transactions, residents in Africa’s most populous country still account for the largest volume of digital token transactions done on peer-to-peer trading platforms outside the US, according to Paxful, an exchange that folded up in April.
The Nigerian SEC said earlier this year that it is is considering permitting tokenized coin offerings on licensed digital exchanges that are backed by assets including equity, debt, property but “not crypto.”
“Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in total loss of their investment,” the SEC said in the Friday statement. It ordered Binance to immediately stop soliciting investments from Nigerians adding that it may take further regulatory action against the platform and other similar exchanges operating in the country.
Earlier this week, the US SEC accused Binance Holdings Ltd. and its Chief Executive Officer Changpeng Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. Binance called that complaint “disappointing,” saying it had engaged with the US SEC in good-faith negotiations to settle the matter.
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