The Nigerian Securities and Exchange Commission (SEC) has issued a warning to local investors regarding the use of Binance, one of the world’s largest cryptocurrency exchanges.
This cautionary measure comes as a response to a previous circular issued against a fraudulent company that was illegally using the Binance brand.
On July 28, the SEC released a statement advising against investing with Binance, citing the absence of a valid license for operations in the country, thereby rendering its activities illegal.
The commission also emphasized the substantial risks associated with investing in cryptocurrencies, highlighting the potential for significant financial losses:
“Any member of the investing public dealing with the entity, making such solicitation is doing so at his/her own risk.”
This is not the first time the SEC has taken action against Binance.
In June, the commission published a similar circular, limiting the activities of Binance Nigeria, which was proven to be a fraudulent entity unaffiliated with the legitimate Binance exchange.
In response, Binance issued a cease and desist notice to Binance Nigeria.
READ MORE: SEC Chairman Gary Gensler Raises Alarm Over Widespread Fraud in Crypto Market
It’s worth noting that Nigeria has maintained a cautious approach to the crypto industry, despite its efforts to promote the central bank digital currency (CBDC), known as the eNaira, which was launched in 2021.
However, adoption rates of the eNaira have fallen below expectations, leading the central bank to explore options to boost its usage.
In July, the CBDC system was upgraded with near-field communication technology, enabling more convenient and secure contactless payments.
Furthermore, starting from May 2023, Nigeria implemented a 10% tax on gains from the sale of digital assets, including cryptocurrencies.
Local stakeholders criticized this measure as “premature.”
Cointelegraph sought further commentary from Binance regarding the SEC notice, but no additional statements have been provided at this time.
As for Binance and other unregistered platforms, the SEC demands an immediate cessation of services in Nigeria.
The regulatory body is determined to safeguard local investors and uphold the legality of financial activities within the country’s borders.
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