Nigerias Binance crackdown threatens Web3 industry

According to Uwakwe, the head of Nigeria‘s crypto intercommunity working group, investors worry about potential repercussions similar to Binance’s fate when investing in local Web3 companies.

Nigeria is feeling the consequences of actions against Binance executives, with investors withdrawing from deals and partnerships, particularly in the web3 sector. They mention Nigerias perceived lack of safety for business and government hostility, citing the Binance case as evidence, according to Lucky Uwakwe, the chairman of Nigeria's Blockchain Industry Coordinating Committee (BICCoN).

In an interview with Cointelegraph, Uwakwe, head of 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’ concerns.

According to Uwakwe, investors worry about potential repercussions similar to Binances fate when investing in local Web3 companies. He pointed out that already invested parties are gradually divesting.

Binance executives Tigran Gambaryan and Nadeem Anjarwalla came to Nigeria in February following claims that the exchange manipulated the country‘s fiat currency, the naira. The executives were detained and slammed with five counts bordering on money laundering after a meeting with the Nigerian government over Binance’s regulatory woes.

Uwakwe stated that the governments approach to the Binance issue is adversely impacting the entire nation. By pursuing fines against Binance, the government is essentially undermining the entire industry, sacrificing potential growth for short-term measures.

When asked about the possibility of the current trial resulting in an acquittal for the Binance executives, Uwakwe expressed skepticism. He believes the executives face slim chances of acquittal unless certain conditions are met internally by the company, according to the governments perspective. He said,

“The chances are probably 90-10, 90 for the government,10 for the Binance executives in question…”

Uwakwe emphasized that even in the event of the Binance executive‘s acquittal by the judge, there’s a strong possibility that the Nigerian government may disregard the court ruling. This pattern has been observed before, especially in cases perceived to threaten the countrys stability.

Uwakwe addressed a potential question from the international community about why the Nigerian crypto community isnt vigorously advocating for the release of the Binance executives. He suggested that if Binance had engaged relevant associations earlier, they would have garnered support from pressure groups and lobbying efforts.

The Nigerian government has often been at odds with cryptocurrency exchanges. Binance ceased operations using the naira on March 8 after Nigerian government criticism of crypto exchanges singled it out in February.

In August 2022, Nigeria was named the most crypto-obsessed country in the world by the number of Google searches for “cryptocurrency” or “buy crypto.”