Calls for Compliance-Focused Crypto Regulation in Nigeria

In Nigeria, there is increasing advocacy for a shift in the regulatory framework governing the cryptocurrency industry, with calls for a focus on compliance rather than criminalization. Obinna Iwuno is the former president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). He has emerged as a prominent advocate for a more balanced regulatory approach.

Iwuno has also noted that the current legal framework, which has resulted in contract laws and legal battles, and the arrest of cryptocurrency personalities, may harm Nigeria’s image and the development of the cryptocurrency business in the country. He has advocated for fines and operational restrictions to be an area of focus in the regulatory process as opposed to punitive measures unless there are litigation issues or threats to national security.

In light of this assertion, Iwuno posited that as Nigeria takes its position in the world market of cryptocurrency, what is needed is regulation rather than a blanket ban. He argued that there are greater benefits that result from proper regulation of the ecosystem than there are losses that come with it.

This advocacy comes at a time when Nigeria is entangled in various legal disputes with Binance, a significant global crypto exchange. For instance, Binance has been associated with money laundering and tax evasion issues leading to the arrest and detention of its employee, Tigran Gambaryan. Such a strict regulatory approach has provoked skepticism among market participants regarding the ability of Nigeria to expand the crypto industry and the country’s creditworthiness.

Nigeria Urged to Adopt Dialogue-Based Regulation Like India’s Handling of Binance

However, some of the local experts have mentioned that India’s approach to such issues in the recent past involving Binance has been much better. In India, the Financial Intelligence Unit (FIU) imposed a $2.25 million fine on Binance and required the exchange to register as a reporting entity. This enabled Binance to carry on as usual while navigating the legal boundaries that govern its operations, something that has earned it the reputation of an exemplary strike between the regulatory authorities and the cryptocurrency exchanges.

Policy and data analyst, Obinna Uzoije, has expressed the same sentiments as Iwuno regarding the comparative strategies of India and Nigeria. Uzoije supports a dialogue and compliance approach to regulation asserting that it establishes effective regulation and encourages innovation, which is important when gaining investors’ trust.

This perspective underscores a growing belief that a shift toward a compliance-focused regulatory framework could better support the cryptocurrency industry’s growth and stability in Nigeria.