The Nigerian government remains open to cryptocurrency businesses operating domestically, despite a lawsuit against Binance and the detention of Binance's senior executive, Tigran Gambaryan. Nigeria's Information Minister, Mohammed Idris, affirms that the country's laws are being strengthened not to hinder businesses, but to ensure regulatory compliance.
Nigeria has filed an $81.5 billion lawsuit against Binance, accusing the exchange of causing the naira's decline and owing $2 billion in taxes. By March 2024, the M2 money supply of the naira had increased rapidly. Despite numerous cryptocurrency businesses operating, Nigeria's Securities and Exchange Commission's new regulations offer little hope for cryptocurrency investors.
In October 2024, Nigeria tightened laws related to cryptocurrency advertising, requiring digital asset providers to be licensed before using third-party advertising services. In February of the same year, a plan to tax cryptocurrency transactions was announced to generate government revenue.
According to Chainalysis's "Global Acceptance Index 2024", Nigeria ranks second globally in cryptocurrency acceptance, receiving $59 billion in cryptocurrencies between July 2023 and June 2024. However, taxing cryptocurrency transactions may not generate the expected revenue.
Nigeria leads Africa in cryptocurrency received value, primarily due to a strong decentralized market that helps avoid centralized exchanges and tax tracking. Importers use cryptocurrencies to overcome naira volatility and exchange rate risks. With the national currency continuing to decline rapidly, these importers tend to continue using cryptocurrencies and find it challenging to report peer-to-peer transactions to the Nigerian government.
