Crypto Crackdown To Stabilize The Naira Is Now A Standoff

Nigeria, Africa’s top cryptocurrency market, is in a major dispute with Binance, one of the biggest names in the crypto world. 

Nigeria’s government has intensified its crackdown on unregulated crypto activities, resulting in a serious impasse following escalating tensions between Binance and the government.

Binance is one of the world’s largest cryptocurrency exchanges.

Nigeria cracks down on crypto

Nigeria is currently grappling with a debilitating economic crisis, with inflation soaring to nearly 30%.

The Nigerian government has turned its attention to cryptocurrency in an attempt to stabilize its currency, the naira (NGN).

The Nigerian government accused Binance of facilitating unregistered crypto exchanges which it claims has caused it to lose out on $26 billion in tax revenue.

There were reports that Nigeria demanded $10 billion in compensation but both the Nigerian government and Binance have denied these claims.

Binance halts naira services

Tensions came to a head last month when Nigerian authorities blocked web access to cryptocurrency exchanges.

They also detained two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, who had flown to Nigeria to discuss the crackdown.

Gambaryan, a former US Internal Revenue Service special agent, is Binance’s head of financial crime compliance. Anjarwalla, a UK citizen, is a regional manager for Africa at Binance.

In response, on March 7, Binance stopped offering trading options involving the Nigerian currency.

NGN services were also removed from Binance’s auto-invest tool and Binance Pay.

Binance execs remain in custody

The Nigerian government is now also demanding that Binance share information on its top 100 users in the country and all transaction history for the past six months.

Meanwhile, the detention of Binance’s senior executives has now entered a third week.

According to the Financial Times, Nigeria’s anti-corruption agency was permitted to detain the executives for 14 days, a period that ended on Tuesday.

This standoff’s legal and diplomatic implications are profound, affecting not just Binance’s operations but also the broader landscape of cryptocurrency regulation in Africa.

As Nigeria seeks to attract overseas investment with market-friendly reforms, its tough stance on cryptocurrency reveals the challenges faced by emerging economies in balancing innovation with regulation.