Blockchain
Nigerian Blockchain Committee warns of impact
The ongoing legal battle between Nigerian authorities and cryptocurrency exchange Binance has had a significant impact on the country’s blockchain industry. The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) recently expressed concerns about the negative impact of the ongoing dispute and called for a “balanced resolution.”
Nigerian Blockchain Industry Hit by Binance Saga
BICCoN has released a public statement addressing the ongoing situation legal problem involving Binance and its detained executive, Tigran Gambaryan. Nigeria’s blockchain committee has expressed concerns from leading organizations in the country about the fallout the controversy could have.
The committee is a “cross-community working group dedicated to promoting a collaborative, innovative and secure blockchain ecosystem in Nigeria.” Major blockchain organizations make up BICCoN, including Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN) and Stakeholders in Blockchain Technology Association of Nigeria (SiBAN).
BICCoN announces statement addressing Binance dispute's impact. Source: BICCoN on X
In the statement, BICCoN President Lucky Uwakwe highlighted industry concerns regarding the Binance case developments in the country and the “important implications for the national interest, the reputation of the Nigerian blockchain sector and our international collaborations.”
According to the blockchain committee, the long legal battle against the exchange and the detention of Gambaryan and Nadeem Anjarwalla, which escaped in March, it caused “harmful effects” on industry collaborations and investments and on the country’s reputation.
These events have led to a chilling effect on investment, with a notable decline in foreign investment and collaborations with Nigerian web3 startups. Interestingly, these foreign investments and collaborations are crucial to fueling innovation, creating jobs and driving economic growth in the country.
The president of BICCoN believes that the possibilities of maintaining and consolidating innovative collaborations are threatened. Uwakwe stressed that the hostile landscape has already affected investments.
Since the Binance saga began, there has been a “noticeable decline in investment in Nigerian web3 startups.” Additionally, the investment community is “monitoring” how authorities handle the controversy as “the possibility of sudden legal action could jeopardize their investments.”
Apparently, domestic investors and entrepreneurs have faced greater difficulties in raising capital, which has stifled innovation and slowed the progress of “promising projects.”
The Committee stressed the importance of collaboration and investment from international entities for the country’s economy and blockchain ecosystem. The crackdown on the sector could leave Nigerian authorities “without the tools and expertise to effectively regulate the sector.”
A request for resolution
The next steps of the Nigerian authorities will be crucial to mitigate the impact on the blockchain sector. Therefore, the committee urged the country’s government to “prioritize constructive dialogue that will lead to a healthy conclusion.”
Excerpt from BICCoN's public statement. Source: BICCoN
Furthermore, he suggested that Nigerian regulators balance their measures with a strategy to support the sector that fosters its growth and development in the country. However, the committee explained that there is a “delicate balance that must be found” between Nigeria’s interest and a welcoming and vibrant landscape.
Accordingly, the BICCoN recommended that the authorities engage in constructive dialogue, ensure a fair legal process and develop a clear regulatory framework. Furthermore, it suggested that the government should address market concerns and strengthen its regulatory capabilities.
Ultimately, the committee believes that commitment to transparency and due process is necessary for a balanced resolution, to rebuild trust and to maintain the country’s credibility “as a reliable partner” for international companies and investors.
Binance Coin (BNB) is trading at $572.5 in the weekly chart. Source: BNBUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com