CZ slams ‘scammer entity’ in Nigeria as more Binance copycats emerge

They say imitation is the sincerest form of flattery. But when it comes to Binance and the Nigerian crypto market, Changpeng Zhao isn’t feeling very flattered. He’s just annoyed.

Earlier this week, Zhao called a firm called Binance Nigeria Limited a “scammer entity” that was pretending to be part of the world’s top crypto exchange. Zhao said his company had issued a cease-and-desist notice to the “fake Binance.”

Illegal name

Now the real Binance tells DL News that numerous companies have been registered using its corporate name in Nigeria, and it is taking legal action to stop them.

“We have been made aware by the Security Exchange Commission in Nigeria of entities that are using the Binance name illegally, including ‘Binance Nigeria Limited,’ " a Binance spokesperson told DL News.

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Zhao isn’t the first CEO of a global company bedevilled by copycats. It goes with the territory. Given Binance’s loose corporate structure and myriad businesses spread across the globe it’s no surprise to see pretenders try and take advantage of its famous brand.

The question is, can they actually be stopped?

The episode started earlier this month when Nigeria’s Securities and Exchange Commission ordered an entity called Binance Nigeria Limited to cease operations in Africa’s most populous nation.

Mistaken entity

Soon enough, it became clear that Nigeria’s financial regulator had mistaken the entity for the real Binance — the global exchange founded by Zhao. The agency’s notification led to false reports that Binance had been banned in Nigeria.

Binance Nigeria Limited confirmed to DL News that it had received the cease-and-desist notice from Binance. A representative of the firm expressed displeasure with Zhao’s “scammer entity” label.

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This person previously told DL News that he registered Binance Nigeria Limited in 2019 for “regulatory arbitrage.” This is a move akin to domain squatting where a recognised brand is registered in a country with the aim of securing payment from the real global outfit if they decide to establish a local presence.

The Nigerian situation is a headache for Zhao as he confronts a pair of regulatory lawsuits in the US that allege he and Binance violated securities laws. The company recently exited its operations in the Netherlands and has stopped its registration efforts in the UK.

Registration squatters

Apart from Binance Nigeria Limited, Binance has other entities to contend with in Nigeria. Details from the registry database show another entity called Binance Exchange Limited that is registered by a different individual who appears to be a prolific corporate registration squatter.

This person has registered at least 10 other companies in Nigeria that bear the names of famous crypto exchanges.

These include FTX Nigeria Limited, Huobi Limited, Coinbase Limited, OKX Nigeria Limited, and Paxful Nigeria Limited, among others.

To share tips or information about crypto in Nigeria please contact the author at osato@dlnews.com.