Nigeria’s Securities and Exchange Commission (SEC) has warned Nigerians against investing or trading on Binance, the world’s largest crypto exchange by trading volume. The Commission, as part of its “statutory mandate of investor protection,” warned local investors of the risk of trading in crypto assets, tagging it as a “high level of risk” which may result in total loss of investments.

According to the circular released by the Commission on July 28, it stated that the operations of Binnace in the country are illegal as the company is neither registered nor regulated by the Commission. 

The circular read:

The Commission again reiterates that the activities of Binance, https://www.binance.com and any such other platform through which the Company solicits investors is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal.

The regulator had earlier released a similar circular in June warning locals about trading on the website operated by “Binance Nigeria Limited.” It also directed the company to cease soliciting funds from investors in any form.

Binance has stated that it doesn’t own or run Binance Nigeria Limited. In a tweet made back in June by CEO Changpeng Zhao, he categorically stated that the exchange had no affiliation with Binance Nigeria Limited and that his company cease and desist notice to the “scammer entity.” He also warned the public not to believe everything they read, probably in reference to allegations that Binance Nigeria Limited was run by the exchange.

This development is still surprising to many considering that Binance Nigeria Limited continues to represent itself as a subsidiary of the exchange. In fact, the entity incorporates the exchange’s logo and other trademarks on its website.

While there is still an air of confusion as to who runs Binance Nigeria Limited, the stance of the Commission on digital assets remains clear. Nigeria’s SEC has continued to regard cryptocurrencies as a high-level risky investment and one that Nigerian investors should stay away from. 

The commission has, however, failed to provide a clear framework for the operation of crypto exchanges in the country. Although it continually promised to work with other regulators in the country to provide further guidance on this matter, no further update has been released on this matter so far.

Despite the regulator’s hostility toward digital assets, Nigerians seem to be heavily invested in cryptocurrencies. A report by crypto exchange Kucoin revealed that 35% of Nigerian adults are crypto investors. 

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