Binance's Operations Declared Illegal in Nigeria, Pursues Expansion in Dubai

Nigeria's Securities and Exchange Commission declared Binance's operations in the country illegal on Monday after the regulatory entity had warned in June to cease offering unregistered securities.

Abuja, Nigeria. Creator: Ugochukwu Odom | Credit: Getty Images/iStockphoto

ABUJA, NG – In a recent notice issued on Friday, Nigeria's Securities and Exchange Commission (SEC) declared the activities of Binance, the world's largest cryptocurrency exchange, as illegal in the country. The SEC's statement also included an order for all crypto platform providers to refrain from soliciting Nigerian citizens.

Binance's Operations Warning

The SEC reiterated its warning from June 9, particularly mentioning a company called Binance Nigeria Ltd. Binance, in response to the earlier warning. However, the regulator's latest notice specifically pointed to Binance's website and confirmed that the exchange's activities were neither registered nor regulated in Nigeria.

Furthermore, the Nigerian SEC has classified all crypto assets as securities, and though they had been processing crypto exchange applications on a trial basis, they will not complete registration until reaching an agreement with the central bank.

The central bank had previously prohibited local financial institutions from engaging with crypto service providers. The Commission's cautionary stance extends beyond Binance's operations, warning the public about investing in crypto assets or products offered by entities that are not registered or regulated by the SEC.

Dubai Expansion

In response to the ban in Nigeria, Binance has been exploring opportunities in other regions. Notably, the exchange has achieved a significant milestone in Dubai, where it recently obtained a license to operate. After receiving a preparatory license in September 2022, Binance successfully met the conditions for an Operational MVP License, allowing eligible users in Dubai to access authorized services, including converting virtual assets to fiat in compliance with VARA-designated standards.

Dubai operates a four-stage licensing process for crypto exchanges, and Binance has already cleared three of these stages. The Full Market Product (FMP) license is the final step, expected to be granted after demonstrating compliance with all regulations.

Binance's expansion in Dubai comes at a crucial time as it faces challenges in other regions. The exchange is set to re-enter the Japanese market but has experienced setbacks in Germany, Austria, Belgium, and the Netherlands. Binance's U.S. arm has also faced legal action for operating an unregistered exchange. Despite the obstacles in certain markets, Binance's strategic move to secure licensing in Dubai showcases the exchange's commitment to adhering to regulatory requirements and providing its services in a compliant manner.