Blockchain Advocacy Group Says Nigerian Government’s Actions Could Drive Crypto Activities Underground

Nigerian blockchain lobby group has said the government’s decision to block access to crypto trading like Binance, Kraken and Coinbase will not “help Nigeria build the much-needed trust and confidence in the financial system.” The advocacy group also said the Nigerian Communications Commission’s directive to telecommunication companies may not be consistent with the “norms of a democratic society.”

Nigerian Government’s Actions Could Push Crypto Activities Underground

The Nigerian government’s decision to block access to cryptocurrency trading platforms, including Binance, Kraken, and Coinbase, will not “help Nigeria build the much-needed trust and confidence in the financial system,” a blockchain advocacy group has said. The group, known as the Blockchain Industry Coordinating Committee of Nigeria (BICCON), argues that such a blockade only provides Nigerian authorities with a “temporary respite.”

However, in the long term, BICCON warns that this “reactionary action” by the Nigerian government will ultimately drive cryptocurrency-related activities underground.

“Based on available data, Nigeria’s present action may—once again—gradually push virtual asset adoption and transactions underground, a place that largely impairs efficient and effective supervision, monitoring, and investigations,” BICCON said in a statement.

Turning its attention to the Nigerian Communications Commission’s (NCC) specific directive to telecommunications companies, the advocacy group argued that this be inconsistent with the norms of a democratic society. While this is likely to yield short-term benefits for the government, it will ultimately undermine the trust and confidence of the residents, the group said.

Therefore, instead of persisting with this strategy, BICCON said the Nigerian government should consider engaging Virtual Asset Service Providers (VASPs).

Binance Urged to Demonstrate Good Faith

Regarding the detention of Binance executives, the advocacy group emphasized the importance of observing the rule of law throughout the adjudication process. BICCON believes that doing so will send positive signals to observers both within and outside Nigeria. The group also encouraged Binance to fully cooperate with the authorities.

“We urge Binance—as well as other VASPs in Nigeria—to fully comply with the applicable
laws and regulations in the country. Binance must demonstrate good faith. Particularly as
a major player in the virtual assets industry, Binance should address the issues and
ensure that it resolves all matters.”

In the meantime, the group’s seven-page statement also tackled the Central Bank of Nigeria’s allegations regarding the $26 billion reportedly laundered through Binance. BICCON concluded the statement by signaling its readiness to engage in a constructive dialogue with the relevant regulators.