A Lagos-based crypto tech enthusiast, Bright Johnson has carpeted the federal government over the detention of two Binance officials, saying the action is not only counterproductive but could eventually undermine the government’s efforts to bring about economic change and growth.
According to Johnson, the Nigerian authorities seem to be lashing out at crypto exchanges, seeking to make them the scapegoats for the naira’s recent devaluation against the US dollar and the country’s soaring inflation rate, which has exceeded 20 percent, reports Vanguard.
He argued that detaining these Binance employees is misguided and could backfire on the government, derailing its efforts to protect Nigeria’s economic interests.
Recall that the federal government, recently, restricted access to several crypto platforms including Binance, recognised as the world’s largest crypto exchange.
Following this action, two Binance executives, American citizen Tigran Gambaryan and Nadeem Anjarwalla who holds UK and Kenyan nationality, who came to negotiate with the government, were detained and have remained in detention without formal charges against them.
For Johnson, “the real leverage the government holds is not the detainment of two foreign nationals, but rather the immense appeal of Nigeria as Africa’s largest and leading economy. The simple fact is that crypto businesses want to operate in the Nigerian market because of its economic importance and until recently, its relatively amenable policies toward crypto adoption by both individuals and businesses.
“Crypto exchanges are not the cause of Nigeria’s economic and inflation woes; this stems from more deeply entrenched policy challenges, global headwinds impacting commodity prices, and other macroeconomic factors beyond the control of any single company. Blaming Binance and seeking to penalise it with dramatic actions like these detentions creates an adversarial climate that will deter investment rather than encourage productive engagement”.
In a chat with select newsmen recently, Johnson said: “The wiser path forward for Nigerian policymakers is to recognise the inherent leverage the country possesses as a major African economic force. In the past, Binance expressed its willingness to comply with appropriate regulations to ensure the sustainability of its operations in this key market. Other major crypto players have indicated the same. However, the actions of the Nigerian government are doing little to encourage these major global crypto exchanges to pursue these objectives.
“By opening a constructive dialogue and developing sensible regulations around crypto, in collaboration with global leaders, Nigeria could bring real transparency, accountability and oversight to the crypto sector – all while maximising the economic rewards and preserving the country’s valuable status as an African innovation hub.
“Doubling down on an adversarial, enforcement-led approach is counterproductive and short-sighted. The detention of the two Binance employees is unlikely to speed up any sort of resolution to whatever legitimate concerns the Nigerian authorities may have. If anything, it slows down, or completely halts, the critical conversation around how crypto exchanges can properly register as regulated businesses, meet robust standards and disclosures, and ultimately help Nigeria realise crypto’s economic development potential.
“Nigeria is right to want a well-regulated crypto market and accountability for any illicit activity. But alienating some of the leading players is self-defeating. You cannot detain your way to better crypto policies or improved economic growth. The government should release the detained Binance staff and open a collaborative conversation, befitting Nigeria’s regional economic power and influence. The true leverage the Nigerian government has, lies not in enforcement, but in making access to Nigeria’s market too important and valuable for global crypto participants to ignore. It’s also an approach that has the best chance of ensuring unwillingness on the part of these crypto market participants to jeopardise their presence in Nigeria by failing to comply with legal requirements” he added.
