Things are getting very tough for cryptocurrency companies operating in Nigeria as the Nigerian government is taking strong action against them.
It all started a few weeks ago when the Central Bank of Nigeria (CBN) accused some crypto firms of illegal foreign exchange dealings. The CBN said these firms were responsible for making the naira currency weaker.
Major fintech companies like OPay, PalmPay, Kuda Bank, and MoniePoint were then barred from adding new customers. Other crypto platforms like Binance, Kraken, and Coinbase were also targeted.
This currency battle became intense when two top executives of Binance, one of the world’s largest crypto exchanges, were arrested after traveling to Nigeria’s capital Abuja . One of them, Tigran Gambaryan, is still in jail awaiting a bail hearing on May 17th.
Nigerian authorities accuse Binance of carrying out over $26 billion worth of illegal forex transactions and not following proper business regulations for the last seven years. They believe the actions of Binance and similar platforms are responsible for the naira’s sharp fall against the US dollar earlier this year.
The anti-corruption agency EFCC has frozen over 1,100 bank accounts suspected of illegal forex trading and money laundering. The Securities and Exchange Commission had warned last year itself that Binance’s operations in Nigeria were illegal.
Following the crackdown, major fintech firms have started issuing stern warnings to their customers against crypto trading. Companies like OPay and Paga have said accounts engaging in such activities will be blocked and user details shared with regulators.
The Nigerian government seems determined to curb currency speculation and illicit financial flows that are destabilizing the naira. However, Binance argues the charges against it are without merit, paving the way for a huge court struggle over cryptocurrency’s future in Africa’s largest economy.
