The Nigerian government is still open to crypto companies operating in the country despite continuing lawsuits against the well-known detention of crypto exchange vinance and Binance enforcer Tigran Ganbarian.
Nigeria’s Information Minister Mohamed Idris told Semafor that many crypto companies are operating in a country that is not facing lawsuits or criminal prosecutions.
“This is part of an effort to tighten the law rather than crippling everyone. It ensures that no one comes and operates without regulations,” Idris told the outlet.
Nigeria filed a $81.5 billion lawsuit against Binan in February, claiming that the exchange had clashes with Nigerian local currency Naira, and that Binan owes $2 billion in back tax as the Nigerian government continues to grasp its wise crypto policy.
Naira M2 money supply has been increasing rapidly since March 2024. Source: Trade Economics
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Nigeria regulations do not give hope to crypto investors
The Nigerian Securities and Exchange Commission concepted cryptographic regulations in December 2024 to tighten the cryptographic marketing and advertising laws.
More specifically, the updated law requires that digital asset providers operating domestically obtain permission before third-party marketing companies perform advertising on behalf of the company.
In February, Nigerian regulators announced plans to tax crypto transactions to generate revenue.
According to ChainAlysis’s 2024 Global Adoption Index report, Nigeria ranks second globally for crypto adoption, while India has taken the top spot.
Nigeria ranks second globally for crypto adoption. Source: Chain Analysis
Chain Olisis also discovered that African countries received $59 billion in cryptocurrency between July 2023 and June 2024.
Despite these impressive numbers, taxing crypto transactions may not provide the revenue the Nigerian government wants.
Nigeria leads African countries in terms of the cryptocurrency values they receive. Source: Chain Analysis
Nic Puckrin, founder and market analyst at Coin Bureau, said Nigeria has a robust over-the-counter market for retail crypto transactions that avoid central exchanges and are difficult to track or tax.
Puckrin added that importers are using crypto to avoid the high volatility of Nigerian Naira and to avoid foreign exchange risk.
The rapid depreciation value of Fiat currencies is unlikely to cease use of encryption, and these importers strongly force them to report crypto transactions that can be carried out by peer-to-peer to the Nigerian government.
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