A Director on the Security and Exchange Commission (SEC), Abdulkadir Abbas, has stated that the operations of Binance negatively impacted Nigeria’s financial system.
Showing before a Federal High Court in Abuja heard on Friday, May 17, Abbas who’s the Director of Registration, Exchanges and Market Infrastructure Division at SEC disclosed that not solely did Binance function in Nigeria illegally, its mode of operation circumvented the normal currency trading route put in place by regulators.
Recounting how Binance and its officers have been invited by the NSA to a meeting to debate its operations and the impression on the Nigerian financial system, the SEC director mentioned;
“On the meeting, it was clearly noticed that the first defendant’s (Binance’s) mode of operation is against the provision of the Investment and Securities Act 2007
“Aside from not being registered in Nigeria and making public solicitation with out authorisation, the primary defendant operates a naira peer-to-peer (P2P) in change for crypto belongings.
“The naira P2P being deployed within the transaction circumvents the normal trading route. It is because the Central Bank of Nigeria (CBN) has banned banks from offering sure settlement platforms for crypto change.
“On account of the naira P2P deployed by Binance, and paired with the big variety of Nigerian customers, who have been leveraging on that model, it adversely affected the official exchange rate.
“As a matter of reality, the Binance platform became a reference level for determining the change fee. The naira P2P mannequin created uncertainty and a high level of volatility within the change fee as Nigerian users’ trade arbitrarily on the platform, thereby impacting negatively financial system stability.
“The naira P2P fee quoted on Binance’s platform is just not referencing any official fee and its steady operation impacts the worth of our naira. This was one of many critical issues raised on the assembly we had on the workplace of the NSA.”
Abbas additionally mentioned the speed at which naira was being bought on Binance’s platform had no relationship with the official change fee. In line with him, the speed on Binance’s platform was not pushed by any fundamentals, and it received to a stage the place the value of the naira was decided based on the speed quoted on Binance’s platform.
He mentioned the speed had no correlation or relationship with the official rate. Abbas additionally mentioned that by operating its platform, which isn’t registered or regulated by the SEC in Nigeria, Binance was in breach of the extant provisions of the Investment and Securities Act 2007.
The SEC Director mentioned;
“As well as, by making public solicitation to Nigerians with out due authorization by the SEC, the first defendant violated the Investment and Security Act.”
