The world’s largest cryptocurrency exchange, Binance, faces regulatory challenges in multiple jurisdictions. The US Securities and Exchange Commission (SEC) filed 13 charges against the company and its CEO Changpeng Zhao, accusing them of a series of violations, including artificially inflating trading volumes, commingling customer assets, misleading investors about market surveillance controls, and operating as an unregistered securities broker. Binance has fought against those claims and is working to ensure that all its operations are transparent and compliant with applicable rules. However, the firm has also announced plans to pull out of the Netherlands, Cyprus, and Canada due to concerns over local regulations.
The company is now transferring its operations in those countries to new partners and working with local regulators to resolve any remaining issues. But the latest headache for the crypto exchange comes from Nigeria, where its operations were recently deemed illegal. Nigeria’s markets regulator ordered Binance to halt its operations in the country, saying that the local unit “Binance Nigeria Limited” that courted Nigerian investors through a website was not registered or regulated, thus making it illegal to solicit investments from the public.
Reuters reports that Binance CEO Changpeng Zhao took to Twitter on Sunday to announce that his company had issued a cease and desist notice to the Nigerian entity, calling it a “scammer entity.” He warned people in the crypto community not to deal with it and urged them to avoid any interactions with the company.
In a statement to DL News, a spokesperson for Binance distanced itself from the mentioned entity in the SEC circular and reiterated that it is seeking clarity from the regulator on the matter. The spokesperson added that Binance is working to ensure that all of its local arms are appropriately registered and regulated while noting that those involved with any unregistered entities do so at their own risk.
The spokesperson said that Binance will continue to work closely with regulators to prevent fraudulent activities. He also noted that the company’s operations in Nigeria had been completely restructured, with the local entity now run by a professional team dedicated to building the best possible customer service.
The Nigerian arm of the Binance ecosystem currently consists of two verified social media accounts on Twitter and Instagram with more than 45,000 followers each and an official blog. The local office also has a community through which it disseminates blockchain and cryptocurrency information. The company’s response to the SEC’s accusations will likely impact its future in the industry significantly, so it will be interesting to see how it responds to this latest challenge. Stay tuned for more updates on this developing story.
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