More saga unfolds in the Binance SEC lawsuit after the crypto exchange publicly announced that one of their acclaimed subsidiaries in Nigeria is an illegal entity. While still in the current lawsuit, things got worse for Binance when the Securities and Exchange Commission released a circular alerting the public that a Binance subsidiary in Nigeria is being used for many scammy operations. The business name of this entity is Binance Nigeria Limited.
Binance CEO Changpeng Zhao immediately came on board to clarify things to the public. He said that Binance didn't know anything about any entity named Binance Nigeria Limited. He also urged any company in Nigeria running such a business should desist from doing so. Changpeng Zhao made the announcement on June 18th, after the Nigerian Securities and Exchange Commission (SEC) released a statement accusing Binance of running an illegal exchange in Nigeria.
"The attention of the Securities and Exchange Commission (the Commission) has been drawn to the website operated by Binance Nigeria Limited, soliciting the Nigerian public to trade crypto assets on its various web and mobile-enabled platforms.
Binance Nigeria Limited is neither registered nor regulated by the Commission, and its operations in Nigeria are therefore illegal. Any member of the investing public dealing with the entity is doing so at his/her own risk," the Securities and Exchange Commission Nigeria said in the circular.
They also warned investors in Nigeria to desist from investing in the company. " As the regulator with the statutory mandate of investor protection, the Commission urges Nigerians to be wary of investing in crypto-assets, and crypto-asset related financial products and services if the service provider/its platform is not registered or regulated by the Commission. Nigerian investors are hereby warned that investing in crypto-assets is extremely risky and may result in total loss of their investment," they said.
Binance Disassociate Itself from Binance Nigeria Limited
After a week and a few days, Binance reacted to the circular, which was already doing more damage to its already embattled reputation. Several sources reported that a Binance spokesperson in Nigeria has already denied being affiliated with Binance Nigeria Limited. The Binance spokesperson also confirmed that the crypto exchange is willing to cooperate with Nigeria SEC to fish out the real owners of Binance Nigeria Limited.
It was clear Binance CEO was concerned about clearing his company's name after he released a statement on Twitter, saying the largest crypto exchange wasn't affiliated with any entity known as Binance Nigeria Limited.
"Binance have issued cease & desist notice to the scammer entity "Binance Nigeria Limited".
Don't believe everything you read in the news," Changpeng Zhao said on Twitter.
Binance have issued cease & desist notice to the scammer entity "Binance Nigeria Limited".
— CZ 🔶 Binance (@cz_binance) June 18, 2023
Don't believe everything you read in the news. 🤷♂️
Binance Still Facing SEC Charges
Although Binance has settled its issues with the Securities and Exchange Commission in Nigeria, it still faces legal troubles in the United States. The managing entities of Binance.US and the company's CEO, Changpeng Zhao, have been charged with 13 offenses, some of which are particularly noteworthy.
The US Securities and Exchange Commission said despite making approximately $11.6 billion from U.S. customers, Binance has refused to register as a legal business entity. Other accusations include trading illegal and unregistered securities on their platform.