Crypto traders in Nigeria have urged the government to take a measured and thoughtful approach to resolving regulatory issues with crypto firms, particularly Binance. Recently, Binance's operations in Nigeria came to a halt after the government accused the company of failing to monitor suspicious transactions related to money laundering and for not having a physical presence in the country to address customer grievances.

Binance's Troubles in Nigeria

In February, the Central Bank of Nigeria accused Binance of facilitating untraceable transactions worth $26 billion (approximately ₹2,18,287 crore). Following this, Binance suspended all its services in Nigeria. Binance also claimed in a blog post that the allegations led to a ban on the company in the country. During this period, several Binance executives were detained, and nearly 1,000 bank accounts related to peer-to-peer trading via Binance were frozen.

This week, Binance CEO Richard Teng requested the Nigerian government to release the detained executive for medical supervision. The court hearing for Binance in Nigeria is now set for October 11. Binance users in Nigeria are worried about potential financial losses due to the ongoing tension between the exchange and the authorities. In July, another crypto exchange, OKX, also decided to exit Nigeria due to regulatory concerns.

Learning from India's Example

Mark Nduagibe, a Nigerian crypto trader, recently spoke to the media during an event in Lagos, where he discussed the situation at length. He emphasized that the people and government of Nigeria need to understand that cryptocurrencies are legitimate trading tools, and the country should take steps to become an early adopter of this technology. For that to happen, Nduagibe said that regulators need to bring more legal clarity for crypto businesses to provide safe services to the citizens.

Speaking about the Binance situation, Nduagibe pointed out that while Nigeria is currently embroiled in a legal battle with Binance, with executives jailed and services suspended, India handled a similar situation with more maturity.

He noted, "We can all see how India managed the issue with Binance maturely, where the exchange was accused of operating as a reported entity without registration. India imposed a $2.25 million fine, marking a significant milestone in crypto regulation. This is the kind of approach Nigeria should adopt instead of allowing the exchange's executives to languish in jail."

India's Approach

Earlier this month, India restored access to Binance in the country after the exchange paid a fine for violating the Prevention of Money Laundering Act, 2002 (PMLA). Additionally, Binance secured its 19th global operating license in India.

Another Nigerian crypto trader told CryptoPolitan, "In comparison, India did not resort to arresting employees or using extreme measures to enforce compliance. Instead, they held Binance accountable through financial penalties and enforced stringent regulatory standards, all while allowing the company to continue its operations."

The Road Ahead

This situation highlights that crypto traders and investors in Nigeria want the government to handle issues with crypto firms thoughtfully and maturely. Drawing from India's example, Nigerian traders have urged the government to hold companies accountable through financial penalties and strict regulatory standards rather than resorting to harsh measures.

It will be interesting to see how the Nigerian government handles this case and whether it learns from India's approach. For now, this is a critical time for crypto traders in Nigeria, and the government's next move could significantly impact the future of the industry in the country.