Crypto access issues raise questions about Nigeria’s regulatory intentions

The Nigerian government needs to be clear on its stance concerning the crypto industry, as its recent actions have been sending mixed signals to the broader community, according to Nathaniel Luz, co-founder and chief marketing officer of Flincap, a local crypto over-the-counter (OTC) exchange.

This comes after recent reports from local crypto users of their inability to access the websites of various crypto exchanges like Binance, OctaFX and others using traditional telecommunication providers. This came to light on Feb. 21, giving rise to speculation about a possible government ban on crypto platforms.

Speaking with Cointelegraph, Luz said it seems like the government of Nigeria is not interested in having a good relationship with people in the crypto space. The government blames the current exchange rate of 1,800 Nigerian naira to $1 on OTC traders trading Tether (USDT) for naira on the peer-to-peer (P2P) market.

Bayo Onanuga has short memory. You can't effectively ban crypto. China did in 2017, their citizen trade it till date. Nigeria did in 2017, Nigeria became the 8 largest crypto trading country.

Focus on fiscal policies such as eliminating corruption, blocking wastages, improving… https://t.co/6U2flrNp5Y

— That Naija Guy™ (@IamThatNaijaGuy) February 21, 2024

Luz insists blaming OTC traders for the current naira value is incorrect, as the crypto industry isn’t responsible for the economic downturn or the naira’s decline. He said:

“I have seen different things in life. I have studied central banks and currencies. But, I have yet to see a government lay the responsibility for its currency failing as the Nigerian government is doing today.”

Listing factors like excess naira, insufficient amounts of United States dollars, heavy reliance on imports, people emigrating from the country, exchanging currency and the uncertainty about Eurobond payments, Luz explained that these issues are unrelated to the local crypto industry.

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In December 2023, the Nigerian government lifted a 2021 crypto ban imposed by the country’s Securities and Exchange Commission and the Central Bank of Nigeria, enabling crypto exchanges to apply for licenses in Nigeria.

However, many crypto startups are still trying to fulfill the criteria for a license, which includes 500 million naira ($340,000) in paid-up capital and an application fee of 30 million naira ($20,000). Luz stated that the Nigerian government would be better off rectifying the licensing issues for local exchanges instead of blaming the local crypto ecosystem for its foreign exchange problems.

Nigeria is currently the biggest P2P market in the world, which came about after the Central Bank of Nigeria banned institutions from buying and selling crypto in 2021.

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