Binance Nigeria Limited is a scam

Regulatory problems have continued to trail Binance with the latest one seeming to rock its Nigerian subsidiary, Binance Nigeria. However, the embattled Chief Executive Officer of the crypto exchange, Changpeng Zhao, declared on Sunday that “Binance Nigeria Limited” was a fraudulent entity.

This revelation comes one week after Nigeria’s Security and Exchange Commission (SEC) publicly stated that Binance Nigeria Limited, a subsidiary of the renowned global cryptocurrency exchange, was neither registered nor regulated by the SEC, thereby rendering its operations in Nigeria unlawful.

In a swift response contained in a blog post made on the Binance official website, the company said it has issued a suspension notice to Binance Nigeria while warning users not to trust any information associated with it.

CZ stated that Binance has issued a suspension notice to this entity, urging them to cease their operations immediately. Furthermore, he warned users not to trust any information associated with this fraudulent entity, advising them to rely solely on official announcements from the platform…The announcement by the SEC raised concerns regarding the legitimacy and compliance of the entity, prompting the firm to take swift action against it.

Binance

Technext consulted the Corporate Affairs Commission (CAC) of Nigeria’s database to fact check and the entity “Binance Nigeria Limited” indeed was registered in December 2019 and is inactive.

According to a report by Mariblock, when one of the individuals listed as an officer of Binance Nigeria Limited was contacted to verify the company’s affiliation with the global exchange, the report stated that Binance Limited Nigeria is not affiliated with the global exchange.

Read Also: SEC declares Binance operations in Nigeria illegal

Nigerians react

This recent revelation generated some serious buzz within the social sphere. While it came as a rude shock to numerous cryptocurrency enthusiasts, others expressed their dissatisfaction with the announcement made by Binance’s CEO, deeming it false.

A Twitter user added fuel to the fire by asserting that he personally knew some employees who were considered prominent figures in Binance Nigeria Limited. Although he mentioned a well-known individual who he claimed had a connection with, a quick Google search revealed that the said person was solely affiliated with Binance Africa.

Another popular Twitter figure in the Nigerian tech space, HackSultan also tweeted:

So you’re telling me someone created an entity called “Binance Nigeria Limited” and has been operating as a Binance subsidiary in Nigeria for year publicly. Hosting events and co and it’s a scam???? Wtf is going on????

However, his fans were quick to reconfirm that most of the events hosted in Nigeria were done by Binance Africa, which is a subsidiary of Binance the global crypto exchange platform, not Binance Nigeria Limited.

What next

Currently, the operations of Binance and its withdrawal are not under discussion. Although this situation has tarnished the reputation of crypto companies in Nigeria, especially among crypto investors, it does not signify the conclusion of fraudulent activities. It is important to note that there are other cryptocurrency entities registered as businesses with the Corporate Affairs Commission (CAC) that may not be associated with any global regulatory body.

This implies that even though the focus may be on Binance at the moment, other global crypto companies might begin to scrutinize their operations, thoroughly examining them for potential fraudulent practices.

For Binance, it had already suspended withdrawals in the US as its troubles with the regulatory bodies in that nation mounted. In 2022, there were reports from Bloomberg that Nigerian authorities and Binance Holdings Ltd. were engaged in discussions to create a digital economic zone aimed at accelerating blockchain technology adoption in the West African country.

The cryptocurrency exchange could only continue engaging in dialogue with policymakers, hoping that its investments in the nation would not be in vain and that its aspirations to promote crypto adoption could be realized.