Nigeria’s Crackdown on Binance Executives Threatens Web3 Industry, Investors Withdraw

Nigeria’s Web3 industry is facing significant challenges following actions taken against Binance executives, leading to a wave of investor withdrawals and concerns about the country’s business environment. Lucky Uwakwe, the chairman of Nigeria’s Blockchain Industry Coordinating Committee (BICCoN), highlighted the perceived lack of safety for business and government hostility as key factors driving investor unease.

In an interview with Cointelegraph, Uwakwe, who heads Nigeria’s intercommunity working group involving Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), and Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), expressed investors’ worries about potential repercussions similar to Binance’s regulatory issues. He noted that existing investors are gradually divesting from local Web3 companies due to the uncertainty surrounding the industry.

The troubles began when Binance executives Tigran Gambaryan and Nadeem Anjarwalla visited Nigeria in February amid allegations of manipulating the country’s fiat currency, the naira. Following a meeting with the Nigerian government, the executives were detained and faced charges of money laundering, further exacerbating concerns within the industry. Uwakwe criticized the government’s handling of the situation, stating that pursuing fines against Binance undermines the entire industry’s growth potential for short-term measures.

When asked about the likelihood of the Binance executives being acquitted, Uwakwe expressed skepticism, citing the government’s perspective and internal conditions within the company. He emphasized the government’s strong position in the trial, suggesting that even if the executives were acquitted, the government might disregard the court ruling, as seen in previous cases threatening national stability.

Uwakwe also addressed the international community’s question regarding the Nigerian crypto community’s response to the Binance executives’ situation. He suggested that if Binance had engaged with relevant associations earlier, they could have garnered support from pressure groups and lobbying efforts, potentially influencing the outcome of the case.

The Nigerian government’s criticism of cryptocurrency exchanges, including Binance, has been ongoing, leading to Binance ceasing operations using the naira in March. Despite Nigeria being named the most crypto-obsessed country in the world in August 2022, the government’s regulatory stance continues to pose challenges for the industry.

As the situation unfolds, stakeholders in Nigeria’s Web3 sector are closely monitoring developments and advocating for a more conducive business environment to ensure the industry’s growth and sustainability. The outcome of the Binance executives’ trial and the government’s regulatory approach will likely have far-reaching implications for the future of Nigeria’s crypto industry.