As advanced countries debate the regulation of cryptocurrencies, the legality of Binance has once again become a topic of discussion. The world’s largest cryptocurrency exchange, Binance, celebrated obtaining a license in Dubai, but issued a warning stating that its operations in Nigeria are considered illegal.
The Nigerian Securities and Exchange Commission (SEC) issued a warning to investors last Friday, stating that Binance does not have regulatory permission to operate in the country and is therefore operating illegally.
This situation is a reiteration of the first warning issued by the Nigerian SEC following the closure of a company called Binance Nigeria Ltd. on June 9. It has since been revealed that this company is not affiliated with Binance, but the SEC maintains its stance on unregulated cryptocurrency exchanges.
A statement from the SEC reads:
“The services and incentives provided by Binance to its users through binance.com are not subject to Nigerian laws. Therefore, they are considered illegal. Institutions, organizations, or individuals conducting transactions through Binance should be aware that they assume this risk themselves.”
As the regulatory authority with investor protection powers, the Commission warns the public that investing in crypto assets carries a high level of risk and can result in the complete loss of investments.
Therefore, the Commission urges the investing public to exercise caution when investing in crypto assets and other products offered or operated by unregistered or unregulated entities.
Binance may find it difficult to obtain regulatory permission to operate in Nigeria, as Nigerian authorities are determined that all cryptocurrencies should be treated as securities. Nigerian officials attribute this stance to a lawsuit filed by the U.S. SEC.
Despite regulatory setbacks in Nigeria, Binance recently received the green light to operate in Dubai and obtained a Minimal Viable Product (MVP) license. With these developments, Binance has ignited a debate that is likely to continue for a long time.