Nigeria’s clash with Binance has sparked concerns within the Web3 industry as investors withdraw their funds due to fears of government hostility. Lucky Uwakwe, the chairman of Nigeria’s Blockchain Industry Coordinating Committee, stated that the case against Binance is creating an unsafe business environment in Nigeria.
Investors are feeling anxious, and their concerns are evident. Uwakwe, who leads a group that includes the Blockchain Nigeria User Group and other local crypto advocates, revealed in an interview with Cointelegraph that investments are dwindling as backers worry about facing a similar fate as Binance. In February, Binance’s top executives, Tigran Gambaryan and Nadeem Anjarwalla, were arrested in Nigeria on accusations of manipulating the Nigerian naira and were charged with money laundering, further escalating tensions.
Uwakwe warned that the government’s harsh stance could potentially stifle the entire Web3 scene in Nigeria. He made it clear that the chances of the Binance executives being released are slim unless Binance complies with the government’s demands. According to Uwakwe, the odds are probably 90-10 in favor of the government. He also cautioned that even if the court clears the Binance executives, the government might choose to ignore the verdict, as they have done in similar cases in the past.
Uwakwe questioned why there hasn’t been more outcry from the local crypto community in support of the Binance executives. His belief is that if Binance had engaged with local associations earlier, they may have had a better chance of garnering support from pressure groups and lobbyists.
The situation escalated further on March 8 when Binance halted all transactions in the Nigerian naira following strong criticism from the government, which had already singled out the crypto exchange in February. This is ironic considering that just a few months earlier, Nigeria was recognized as the world’s most crypto-obsessed nation based on Google searches for cryptocurrency-related terms.
The drama intensified when the Nigerian government tracked down Anjarwalla in Kenya after his daring escape from custody. They are now seeking his extradition to face charges in Nigeria with the assistance of Interpol and Kenyan police. Local media sources revealed that Anjarwalla managed to evade detection once he arrived in Kenya and has since gone into hiding.
The Economic and Financial Crime Commission in Nigeria is leading the investigation and has charged both Binance executives with serious offenses. However, Anjarwalla fled the country on March 22, boarding a flight from Abuja on a Middle Eastern airline. The catch? He allegedly had no valid travel documents as his UK passport was still in the possession of Nigerian authorities.
The underlying issue seems to be the declining value of the Nigerian naira, with the government blaming everyone but themselves. Binance has been made a scapegoat for the currency’s decline, resulting in the detention of its employees.
Bayo Onanuga, an adviser to President Bola Tinubu, even went as far as to claim that the shift to crypto by Nigerian citizens was unpatriotic and detrimental to the country’s currency, proposing a ban on cryptocurrencies to stop the outflow.
Authorities have accused Binance of illegally transferring $26 billion out of Nigeria, leading to the initial arrest of Gambaryan and Anjarwalla. While Anjarwalla has managed to flee, Gambaryan remains in custody, facing charges of tax evasion, money laundering, and operating a financial service without a license. He has pleaded not guilty and has received support from his wife and others who have rallied for his release, gathering over 3,000 signatures on a petition.
