FG Reassures Crypto Firms Amid Binance $80bn Lawsuit, Regulatory Crackdown

Despite an $80 billion lawsuit against Binance, Nigeria remains open to cryptocurrency companies, Information  and National Orientation Minister Mohammed Idris, has affirmed.

He emphasized the government’s focus on regulation rather than suppression.

The federal government sued Binance in February, alleging economic losses and tax evasion, months after detaining a senior executive who was later released. The lawsuit has sparked concerns over the country’s business climate,

But Idris, in an interview with Semafor, insisted that, Nigeria is not hostile to crypto firms operating within legal frameworks. “There are other companies operating in the crypto sector in Nigeria, you don’t see them facing charges,” he told Semafor, stressing that, the crackdown is part of efforts to curb money laundering, terrorism financing, and illicit financial flows.

Nigeria is second only to India on crypto adoption in the world, according to an index by data firm Chainalysis that weighs for population and purchasing power. Nigeria received approximately $59 billion in transaction value between July 2023 and June 2024, the firm said. Crypto use in the country includes holding coins as valuable assets against inflation, and as currency for international trade or remittances.

In sub-Saharan Africa, Nigeria accounts for 40 percent of inflows of stablecoin, a kind of crypto directly pegged to the US dollar, Chainalysis said. But regulatory uncertainty has rattled investors, contributing to declining foreign direct investment.

For instance, foreign direct investment inflows to Nigeria have declined in recent years, falling to $1.6 billion in 2023 from $8.1 billion in 2009, according to World Bank data.

Idris, however, pointed to government initiatives aimed at improving the business environment, including visa reforms and tax policy reviews, in a bid to restore investor confidence.

“The government is working to remove bottlenecks for investors by rolling out measures to improve the ease of doing business including a review of visa rules, tax laws, and expatriate worker quotas,” he added.

Idris denied that Binance was being held responsible for the devaluation of the naira, which was driven by factors including the government’s decision to float the currency in 2023. He maintained that the charges against Binance focused on tax evasion and money laundering, although, he said, “Binance contributed” to the currency’s devaluation.