🟠 Can Nigeria’s SEC enforce a regulatory action against Binance?

Does Binance really solicit Nigerian investors?

Topline: The Securities and Exchange Commission (SEC) of Nigeria has warned the public regarding the operations of Binance Nigeria Limited, which the commission says is soliciting Nigerians “to trade crypto assets on its various web and mobile-enabled platforms.”

• While it’s glaring that the SEC notice targets the global cryptocurrency exchange Binance, Mariblock revealed that the entity addressed in the publication — Binance Nigeria Limited (BNL)— is unaffiliated with the entity operating Binance.com.
• BNL, now inactive, belongs to a speculator who registered the business in hopes that Binance would set up a Nigerian entity using that exact business name.

Be smart: Despite the name mix-up, Mariblock can further reveal the SEC’s circular comes on the back of at least one complaint filed with the commission about the crypto exchange.

Oluwaseun’s view

State of play: While the SEC said it would provide updates on regulatory actions against BNL (read Binance), enforcement is unlikely to be straightforward.

• There will be questions about what counts as solicitation.
• I’ve learned from conversations with experts that Binance offers users services on a reverse solicitation basis.

Reverse solicitation is when a foreign financial company provides services to a client on the latter’s demand — without the company actively seeking the client. If the company uses reverse solicitation, it usually doesn’t have to follow the local rules and regulations for licensing and oversight.

• One of the reasons the United States SEC goes after foreign companies for offering unregistered investment opportunities to Americans is that the US does not have a reverse solicitation exception (source).
• The European Union (EU) does have a reverse solicitation exception. And that’s part of why the bloc is attractive to crypto companies.

In Africa: Among the top-three crypto markets in Sub-Saharan Africa (Kenya, Nigeria South Africa), only South Africa has an explicit provision for reverse solicitation. (source)

• It will be interesting to see if NIgeria’s SEC would consider Binance’s advertising activities in the country (such as the wall drape billboard above) a form of solicitation.

There’s an opportunity for crypto to serve a larger slice of the market and impact everyday people – DFS Lab

Topline: In March, DFS Lab and the Stellar Development Foundation jointly launched the DFS Lab Stellar Africa Fund I.

• The aim: To support African entrepreneurs actively developing groundbreaking digital payment solutions using the Stellar blockchain.

Catch up: In an interview with Mariblock, Joseph Benson-Aruna, a partner at DFS Lab, shed light on the partnership and the core principles underlying the investment firm’s primary fund.

• He explained that DFS Lab had worked closely with Stellar Network for the past two years, stressing that the alliance aligns perfectly with DFS Lab’s vision.
• Benson-Aruna emphasized that his firm is actively shaping its crypto investment philosophy through ongoing discussions with startups building promising cryptocurrency use cases on the continent.
• He declined a question to disclose the size of the fund.
• Watch the video here.

Paxful welcomes new interim CEO

Topline: Paxful, the peer-to-peer bitcoin exchange, announced the appointment of Roshan Dharia as its interim CEO.

Details: Dharia, whose appointment became active on May 30, is expected to enhance Paxful’s operations and investigate strategic alternatives to strengthen the company.

• Dharia was formerly a senior executive of TrustToken, a deFi lending platform that deploys stablecoin loans to crypto-native companies.
• He also founded PTHL Affiliates, an investment platform that specializes in the acquisition and turnaround of distressed private companies across multiple industries.

The tilt: Paxful’s former CEO, Ray Youssef, criticized the appointment on Twitter, saying he has no part in Paxful’s business decisions.

Brief background: Recall that in April, Youssef announced that the exchange was suspending operations, citing challenges, including key staff departures and regulatory issues and legal issues between the co-founders.

• Later in April, Youssef stepped down as Paxful’s CEO.
• In May, Paxful resumed operations, a month after the initial suspension.

Mara partners with NITDA to educate government employees on blockchain technology

Topline: Mara, a blockchain firm, has announced a collaborative initiative with the National Information Technology Development Agency (NITDA) to provide comprehensive training on blockchain technology for Nigerian government workers.

Details: The partnership aims to equip government employees with the necessary skills and knowledge to navigate the evolving landscape of blockchain technology.

• Mara is driving this initiative through its non-profit outfit, Mara Foundation.
• The first training session, held in Abuja on June 1, 2023, focused on the role of blockchain technology in building Nigeria’s digital economy.
• In a statement to Mariblock, Mara highlighted some topics to be covered in the curriculum.
• They include: an introduction to blockchain technology, components, types, and benefits of blockchain, the role of policies in promoting and regulating blockchain, and best practices for developing blockchain policies in the public sector.

Catch up

🌍 World Mobile Group, a blockchain-based telecommunications company, said last week that it completed field tests for its service in Kenya, Mozambique and Nigeria as part of its expansion plan to other African countries. (Read here)

🇳🇬 Nigeria’s new president suspended the country’s central bank governor on Friday. (Techcabal)

🌍 Web3 startup Mara fires its marketing department as it shifts focus from acquiring new users (Techcabal)

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