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While acknowledging the government’s concerns, industry experts agree that a balanced regulatory approach could yield more effective results for Nigeria’s cryptocurrency sector.
Local cryptocurrency stakeholders are strongly advocating for a regulatory framework in Nigeria that emphasizes compliance rather than criminalization. This call for a measured approach to crypto regulation has gained traction, with Obinna Iwuno, the former president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), emerging as a leading voice for a constructive regulatory environment.
A Call for Balanced Regulation
In a recent interview with Cointelegraph, Iwuno criticized Nigeria’s current regulatory approach, which has led to high-profile legal battles and the detention of cryptocurrency executives. He argued that such punitive measures are counterproductive and could harm Nigeria’s reputation on the global stage. Instead, Iwuno advocates for a regulatory environment that imposes fines and operational restrictions rather than resorting to harsh penalties, unless there is a clear legal violation or a threat to national security.
“Nigeria is a significant player in the global cryptocurrency space, and it cannot afford to ignore the need for regulation,” Iwuno stated. “We stand to gain much more from a well-regulated ecosystem than we risk losing.”
Iwuno’s comments come amid ongoing legal challenges involving Binance, one of the world’s largest cryptocurrency exchanges. In Nigeria, Binance has faced allegations of money laundering and tax evasion, leading to the arrest and continued detention of one of its executives, Tigran Gambaryan. This aggressive regulatory stance has raised concerns among industry stakeholders, who fear that it could stifle the growth of the crypto sector in Nigeria and damage the country’s international reputation.
Learning from India’s Approach
In contrast to Nigeria’s approach, other members of the local crypto community have highlighted India’s recent resolution of its regulatory issues with Binance as a model worth considering. 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 allowed Binance to resume operations while ensuring compliance with local regulations. Nigerian crypto professionals praise India’s strategy, which combines penalties with constructive engagement, as a more mature and effective way to manage the complexities of cryptocurrency regulation.
Local policy and data analyst Obinna Uzoije echoed Iwuno’s sentiments, emphasizing the stark contrast between India’s balanced approach and Nigeria’s more punitive tactics. Uzoije highlighted the importance of dialogue and compliance-focused regulation, arguing that India’s method ensured the protection of individual rights while fostering an environment conducive to both oversight and innovation.
“This approach prevents the damaging consequences of imprisoning employees as a means of exerting pressure,” Uzoije noted. He added that India’s strategy represents a forward-thinking regulatory framework that prioritizes cooperation over punishment, thereby minimizing disruptions to business activities and preserving investor trust.
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