Could Nigeria’s bullying of Binance permanently ruin Web3?

Nigeria’s clash with Binance is setting off alarms across the Web3 sector as investors pull out, fearing government hostility could jeopardize their investments. According to Lucky Uwakwe, chairman of Nigeria’s Blockchain Industry Coordinating Committee, the case against Binance is painting the Nigerian market as unsafe for business.

Turmoil and Trepidation

Investors are spooked, and it’s showing.

Uwakwe, leading a group that includes the Blockchain Nigeria User Group and other local crypto advocates, revealed in a Cointelegraph interview that the fear is tangible. Investments are drying up as backers fear they might be next after Binance got hit hard. Binance’s top execs, Tigran Gambaryan and Nadeem Anjarwalla, were arrested in Nigeria this February. They faced accusations of manipulating the Nigerian naira and were slapped with money laundering charges, escalating the tension.

This harsh stance from the government could throttle the entire Web3 scene in Nigeria, Uwakwe warned. He was pretty clear about the prospects of the Binance execs walking free—slim, unless Binance bends over backwards to meet the government’s internal conditions.

He put it bluntly, “The chances are probably 90-10, 90 for the government, 10 for the Binance executives…” Uwakwe also threw out a caution that even if the court clears the Binance folks, the government might just ignore the verdict. This isn’t new. It’s a seen-before scenario where the government sidesteps rulings that don’t align with their view, especially in sensitive cases.

Uwakwe questioned why there isn’t more outcry from the local crypto scene for the Binance execs. His take? Had Binance engaged local associations sooner, they might have had a fighting chance with more backing from pressure groups and lobbyists.

Legal Battles and Crypto Crackdowns

Come March 8, Binance stopped all transactions in the Nigerian naira, following sharp critiques from the government, which had already singled out the crypto exchange in February. It’s a bit ironic, considering that just months before in August 2022, Nigeria was dubbed the world’s most crypto-obsessed nation based on Google searches for cryptocurrency-related terms.

The drama intensified when the Nigerian government traced Anjarwalla to Kenya after his daring escape from custody. They’re now pushing for his extradition to face his charges back in Nigeria, with the help of Interpol and Kenyan police. Local media sources revealed Anjarwalla ducked out once he landed in Kenya, staying under the radar.

Nigeria’s Economic and Financial Crime Commission is steering the investigation, sticking both execs with serious charges. But Anjarwalla didn’t stick around—he bolted from Nigeria on March 22, catching a flight from Abuja on a Middle East airline. The catch? He supposedly had no valid travel documents since his UK passport was still held by Nigerian authorities.

The underlying issue? The Nigerian naira is tanking, and the government’s pointing fingers everywhere but at themselves. They’ve pegged Binance as a scapegoat for the naira’s downfall, detaining its employees in the process.

Bayo Onanuga, an adviser to President Bola Tinubu, even claimed that the citizens’ shift to crypto was unpatriotic and was bleeding the country’s currency dry, proposing a ban on crypto to stem the flow.

Authorities have accused Binance of illegally funneling $26 billion out of Nigeria, leading to the initial detainment of Gambaryan and Anjarwalla. While Anjarwalla has fled, Gambaryan remains, fighting charges including tax evasion, money laundering, and operating a financial service without a license. He’s pleaded not guilty, supported by his wife and others who’ve rallied for his release, gathering over 3,000 signatures in a petition.