In a recent development, the Nigerian Securities and Exchange Commission (SEC) has cautioned local investors against engaging with Binance, one of the world’s largest cryptocurrency exchanges. The warning was prompted by a previous circular issued by the SEC, exposing a fraudulent company misusing the Binance brand.
The SEC’s warning, issued on July 28, highlights that Binance lacks the necessary license to operate within Nigeria, making its activities in the country illegal. The agency further emphasizes the potential risks associated with dealing with the platform, noting the possibility of facing a total loss of investments.
This is not the first time the Nigerian SEC has raised concerns about Binance’s operations. In June, the regulatory body issued a circular restricting the activities of Binance Nigeria, a fraudulent entity falsely claiming affiliation with the global exchange. The circular, similar to the current warning, aimed to protect investors and platforms from potential risks and unauthorized operations.
In response to the SEC’s actions, Binance promptly issued a cease and desist notice to Binance Nigeria, distancing itself from the fraudulent entity and emphasizing its commitment to adhering to regulatory requirements.
Nigeria Introduced 10% Tax on Digital Asset Gains
Known for its cautious approach towards the crypto industry while actively promoting its central bank digital currency (CBDC), the eNaira, Nigeria is facing unexpected hurdles with lower-than-anticipated adoption rates since its launch in 2021. In response to this challenge, the Central Bank of Nigeria (CBN) has been exploring various strategies to boost the usage of the eNaira.
Recently, the CBN took a significant step towards enhancing the eNaira’s utility by upgrading the CBDC system with near-field communication (NFC) technology in July. This upgrade aims to facilitate seamless and secure contactless payments, potentially making the digital currency more appealing to users.
However, amidst these efforts to drive the adoption of the eNaira, the Nigerian government introduced a 10% tax on gains from the disposal of digital assets, including cryptocurrencies, starting from May 2023. The move has drawn mixed reactions from local stakeholders, with some expressing concerns about its timing and potential impact on the crypto market.
The imposition of the 10% tax on digital asset gains is seen as a measure to increase government revenue and regulate the growing crypto space. Nonetheless, critics argue that the tax may be premature and could deter investment in the nascent sector. They stress the importance of fostering a conducive environment for innovation and investment in digital assets to drive economic growth and financial inclusion.
