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(Kitco News) -
The Securities and Exchange Commission of Nigeria is the latest regulator to target Binance, announcing over the weekend that the operations of the world’s largest cryptocurrency exchange in the country are illegal, days after the U.S. SEC leveled 13 charges against Binance and their founder Changpeng Zhao.
“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,” they wrote in a statement. “Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal.”
The Commission said they plan to work with other regulators in Nigeria to address the matter, and will provide updates about “further regulatory actions” against Binance Nigeria Limited as well as other illegal crypto platforms in the country.
The Commission added that any member of the public who engages with Binance Nigeria is doing so at their own risk, and the company “is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever.”
Cryptocurrency has emerged as a very contentious issue in Nigeria over the past year as the government has been pushing the country’s central bank digital currency (CBDC) – the eNaira – to replace physical money, which has led to a severe shortage of national fiat reserves along with a scramble for other forms of money including cryptos such as Bitcoin.
The cash shortage began in late 2022 after the central bank initiated a plan to replace old 200-, 500- and 1,000-naira notes with new ones in an effort to withdraw excess liquidity from the system, get a handle on inflation and curb rising insecurity.
The lack of available cash in a country where physical notes previously accounted for 90% of all transactions has led to a 63% increase in the value of eNaira transactions this year, with more than 22 billion naira ($47.7 million) processed as of March, according to the Central Bank of Nigeria (CBN). Thirteen million e-wallets have also been created, a more than twelvefold increase from October.
The increase in adoption comes nearly 18 months after the eNaira was first launched and at a time of economic strife in the country amid a shortage of cash. In January, amid a collapse in the value of the naira, the government placed limitations on the amount of cash citizens could withdraw from ATMs, which led to a spike in the price of Bitcoin against the naira.
On April 27, Abdulkadir Abbas, head of securities and investment services for Nigeria’s SEC, said the country plans to allow permits for tokenized coin offerings on licensed digital exchanges that are backed by assets like equity, debt and property but specifically stated that cryptocurrencies would not be permitted to be used as collateral.
Abbas referred to fintech as “a building block for enhancing financial inclusion,” and said it is a vital piece in facilitating the transformation of the Nigerian capital market. “Traditional means can no longer work, the average age of investors in the capital market is 45-50 years and we are currently trying to attract the millennials to the market and this can be achieved with the aid of fintech,” he said.
Nigeria is Africa’s most populous country with more than 200 million citizens, and 43% of that population is under the age of 14 and more open to the digital world.
