As if things weren't bad enough already, it has been widely reported that Nigeria's Security and Exchange Commission released a circular that bans Nigerians from trading on Binance. Now, for what it is worth, the SEC doesn't exactly make laws, so this was released in a circular, so the rules around enforcement are still cloudy.
The SEC has largely maintained a neutral stance on crypto due to the Executive and Legislative arms' indecisiveness towards digital assets. Due to this stance, crypto trading has neither been illegal or legal, largely residing in the grey area of regulation.
For what it is worth, the released circular focuses solely on Binance but it also went further to describe trading crypto as being extremely risky. Again, this doesn't outrightly mean that crypto is banned in Nigeria and so, doesn't actually mean law enforcement is involved.
Now, in case you've never heard about Nigerian law enforcement, then you'll be shocked to find out that there will certainly be an abuse of this situation. In the past, I was technically kidnapped by law enforcement officers for having Binance application in my phone, so I advise the general public to be very careful.
What this means?
There hasn't been a reaction from Binance but I expect there to be some resolution in the coming days. May Nigerians depend on Binance for onboarding and liquidation to Naira to survive, so it is safe that this circular could have an effect on this.
We largely depend on P2P trading through a local intermediary that makes life easier for Nigerian traders. There may or may not be a tweak in this since we technically exchange Naira for Naira digitally on Binance, so there's hardly any adverse effect on the currency.
My hunch is that the SEC is simply capitalising on the regulatory issues that Binance is facing in the US to make this circular. They're simply piling on the pressure at a seemingly opportune time to inflict even more damage to the crypto exchange.
There's also the fact that Binance recently introduced a BTC/NGN trading pair that the SEC might view as antagonistic towards the Naira. This wasn't stated in the circular but I suspect it might be part of the agenda.
This move by the SEC could also be an opportunity to create some regulatory frameworks that will suck out value from Binance at a time when the country is balls-deep in debt. They'd probably be looking to bring Binance to the table for a "conversation" that will most likely lead to money moving Nigeria's way
Another catalyst could be the calamitous state of the general crypto market that has caused massive pain to investors. It is quite possible that some pained bigwigs see this as an opportunity to hurt the market through Binance and push their crypto smear campaign further down the throats of anyone willing to swallow.
After years of silence and leaving crypto traders out in the wind, the SEC has shown its hand. They're anti-crypto and now we know but let's face it, it's not like we're surprised.