The Nigerian government’s crackdown on cryptocurrency exchanges, including its targeting of Binance, has prompted some cryptocurrency firms to reconsider plans to either enter or further invest in the West African nation. A founder of a cryptocurrency exchange stated that the crackdown on Binance raises questions about the fundamental rule of law necessary for any society to function effectively.
While Nigerian authorities have justified their crackdown on Binance and crypto platforms in particular, according to experts the move has unfortunately led crypto firms to reconsider plans to either enter or further invest in the West African country. The crackdown, which began just a few months after the central bank lifted its indirect ban on crypto activities, is seen by some as a regressive step for Nigeria.
Farzam Ehsani, co-founder and CEO of Valr, one of Africa’s top crypto exchanges said that the actions taken by Nigerian authorities extend beyond merely affecting the confidence of crypto investors.
While many in the African cryptocurrency world seem to share the frustrations of Valr’s CEO, others, such as Leona Hioki, co-founder of the Ethereum Layer 2 platform, Intmax, believe the Nigerian government’s actions are not driven by malice. Instead, Hioki argues that the crackdown could be because the government wants all players, including Binance, to comply with regulations.
Hioki, a well-known Ethereum researcher in Japan, said this understanding of what may be influencing the Nigerian government is why Intmax, unlike others, is not leaving the country.
“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.
However, similar to the CEO of Valr, Hioki acknowledged the potential of cryptocurrency in Nigeria and the importance of fostering its use rather than stifling it. Nevertheless, to ensure this is achieved, Hioki urged the cryptocurrency industry to explore better trade-offs or find moderate middle grounds that are not extreme.