The current crackdown on cryptocurrency by the Nigerian government including its targeting of Binance has prompted experts and investors in the field to voice out their lack of confidence in investing in the West African country.
According to Bitcoin News , the Crackdown on Binance and other crypto platforms have led crypto firms to reconsider their plans to either enter or further invest in the West African country.
The crackdown which began a few months after the Central Bank lifted an indirect ban on Crypto was perceived by Crypto firms and investors as a regressive step for Nigeria.
The Nigerian government recently detained two Binance executives accusing the crypto exchange of tax evasion. Although Binance has shown willingness to work with the Nigerian government it has vehemently refused to release names of top Nigerian users.
The Nigerian government battling with the free fall of its local currency has blamed crypto exchanges like Binance for currency manipulation. The faceoff led to Binance pulling its services from Nigeria and the Nigerian government instructing Nigerian telecoms to block access to crypto exchanges in the country.
While the Naira seems to have improved after the crackdown Crypto experts and investors say the entire episode has left a bitter taste in their mouths as regards investing in the country.
Farzam Ehsani, Co-founder and CEO of Valr, One of Africa’s top crypto exchanges explained that the action taken against Binance extends beyond affecting the confidence of Crypto investors
- “As of today, some Binance executives in Nigeria have been charged with what seem to be spurious allegations which is a very worrying state of affairs that has ramifications far beyond the crypto industry in Nigeria: What has transpired calls into question the very fundamental rule of law that is required for any society to function effectively,” Ehsani asserted.
While many in the African cryptocurrency space share the frustration of Valr CEO, some dissenting voices have argued in favour of the Nigerian government saying that the country just wants to strike a balance between innovation and regulation.
Leona Hioki, the cofounder of the Ethereum Layer 2 Platform, Intmax is one of such voices citing how the company invested in Nigeria despite the news of the crackdown on Binance.
- “Some friends even advised us against going at such a time, especially since we arrived in Nigeria just two weeks after the news about Binance broke. [However], we recognize that the Nigerian government is actively working to strike a balance between innovation and regulation,” the Intmax CEO said.
Hioki just like the CEO of Valr acknowledged that indeed Nigeria has enormous potential for cryptocurrency and crypto firms and investors need to work with the Nigerian government to find a middle ground that is not too extreme for smooth operations.
Recommended reading: Nigeria working with Interpol to extradite Binance executive who escaped from Custody
What you need to know
- The Nigerian government detained two Binance executives and charged Binance, the world’s largest Crypto exchange with Tax evasion. One of the detainees escaped from custody but was still tried in Absentia.
- According to the Africa Report, a Crypto firm said Nigeria is one of the only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the period they studied. The firm also said the volume of crypto transactions in Nigeria grew 9% to $56.7bn between July 2022 and June 2023.
