One of the world’s largest Cryptocurrency exchanges, Binance, has outlined two critical conditions before it can consider registering under the Nigerian Securities and Exchange Commission’s (SEC) program for onboarding Virtual Assets Service Providers (VASPs). This framework, which includes strict requirements such as establishing a local office, was created to regulate cryptocurrency platforms offering services within the country. The SEC recently granted provisional approval to two local Crypto exchanges, Quidax and Busha, recognising them as legally authorised trading platforms under its Accelerated Regulatory Incubation Programme (ARIP).
This initiative is part of the SEC’s efforts to regulate the virtual assets industry and ensure that crypto platforms comply with Tax obligations and National Security measures. However, Binance has not participated in this initiative and has outlined two requirements that must be fulfilled before participating. Initially, Binance is urging the release of one of its leaders, Tigran Gambaryan, who is detained in the country. The company asserts that this matter needs to be addressed before any talks concerning alignment with the SEC’s regulatory guidelines. The second stipulation pertains to its ongoing legal conflict with the authorities, who have charged it with tax evasion, money laundering, and breaching foreign exchange laws.
Federal govt have taken legal action against the firm for tax evasion.
Idris Mohammed, Nigeria’s Minister of Information, expressed that the cryptocurrency company made over $20 billion in Revenue in 2023 yet failed to pay the correct taxes. Federal authorities have initiated legal measures against the firm due to these alleged violations, though the company asserts it is innocent. A representative from Binance stated that the platform will consider government registration only after these legal and regulatory matters have been addressed. The company recognised the nation’s advancements in its digital asset regulatory framework; however, it emphasised that it would refrain from seeking registration until its executive is released and the legal disputes with the government are resolved.
Moreover, despite facing legal challenges and opting not to participate in the regulatory framework, the giant cryptocurrency company continues to attract use from Nigerian customers. A confidential informant from the Securities and Exchange Commission indicated that the company appears unconcerned about adhering to the onboarding guidelines, given that its offerings are still reachable by the local people. Many cryptocurrency traders still utilise Binance, facing only a major limitation regarding bank transactions. Despite the platform not being under government regulation, some users have turned to alternative ways to connect, such as employing virtual private networks (VPNs).
Global crypto exchanges must set up local offices for oversight.
Furthermore, the SEC has asserted that its rules stipulate that any international Cryptocurrency Exchange providing services in the country must set up a local branch for adequate supervision. Despite this, the company has pushed back against the demand, arguing that the SEC’s regulations do not have legal support from the National Assembly. Sources indicate that the guidelines were quickly assembled after the government detained their executives. As it stands, the company has not met the government regulatory requirements, but the agency anticipates that it will eventually register owing to its significant number of domestic users.
Abdulkadir Abbas, the SEC’s Director, emphasised that the ARIP framework and the recent endorsements for Quidax and other services are part of the official position on cryptocurrency regulation. The SEC is dedicated to incorporating all cryptocurrency exchanges, such as Binance, into government regulations to guarantee adherence to regional legislation. In the meantime, the crypto firm’s presence in the nation has experienced a small decline because of its ongoing legal challenges, yet it remains favoured by Nigerians who circumvent limitations through VPNs and alternative methods.
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Although the SEC attempts to enforce stricter controls on cryptocurrency platforms, the crypto company has stated that it will hold off on engaging with regulatory guidelines until all legal and compliance issues are settled. The conflict between the company and the government underscores the difficulties of overseeing global sectors such as cryptocurrency. As the authorities aim to create more defined rules for providers of virtual assets, some crypto companies are hesitant to adhere to local laws, casting doubt on the future of crypto governance in the nation.