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SEC may wield the big hammer on Binance, other crypto platforms for illegal operations

SEC may wield the big hammer on Binance, other crypto platforms for illegal operations

The Securities and Exchange Commission (SEC), Nigeria, is considering imposing huge fines, potentially amounting to billions of dollars, on Binance, one of the world’s largest exchanges, and other cryptocurrency companies operating within the country.

On Tuesday, Olayemi Cardoso, governor of the Central Bank of Nigeria, disclosed that $26 billion flowed through Binance Nigeria in one year from sources and users the apex bank could not identify.

Nigeria blames crypto platforms for aiding currency speculation and fueling the rapid devaluation of the naira. Authorities in the country are demanding to see a list of Binance’s Nigerian users since its inception, someone familiar with the matter told FT.

Nigeria’s Securities and Exchange Commission had last year disclaimed Binance Nigeria Limited, saying the platform was “neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal.

Also, as the regulator with the statutory mandate of investor protection, the Commission urged Nigerians to be wary of investing in crypto-assets, and crypto-asset-related financial products and services if the service provider/its platform is not registered or regulated by the Commission. Nigerian investors were also warned that investing in crypto-assets is extremely risky and may result in a total loss of their investment.

Binance Nigeria Limited was also directed by the SEC to immediately stop soliciting Nigerian investors in any form whatsoever.

The Commission said it will provide updates on further regulatory actions concerning 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,” SEC said in a public notice.

“The attention of the Securities and Exchange Commission (the Commission) has been drawn to the website operated by Binance Nigeria Limited, soliciting the Nigerian public to trade crypto assets on its various web and mobile-enabled platforms.

“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 SEC had said last year in a circular to the investing public.

Nigeria’s renewed crackdown on cryptocurrency has opened a new chapter, with the country going after senior executives at Binance.

Two executives of the crypto platform who flew to Nigeria following the country’s recent restriction on several cryptocurrency trading websites have been detained by the office of the country’s national security adviser and their passports seized, according to a report by Financial Times (FT).

This confirms recent allegations that the country may be going after crypto traders to rein in currency speculators. This aligns with the government’s clampdown on crypto platforms, whose websites are now restricted, in the country.