Katherine Ross

A Nigerian court has refused Binance executive Tigran Gambaryan’s bail application, a family spokesperson told Blockworks.



The bail was denied on the grounds that the court believed Gambaryan could “jump bail,” though, per the spokesperson, he lacks a passport. The court was previously assured that Gambaryan wouldn’t flee. However, his colleague — Nadeem Anjarwalla — notably <a href="https://blockworks.co/news/binance-executive-escapes-nigerian-custody">escaped Nigerian detention</a> earlier this year.&nbsp;



“I truly cannot believe that my innocent husband is now — on his 40th birthday — having to face a trial for charges that he has nothing to do with. The whole world is watching what he is being put through and I just pray that common sense and justice will prevail and that Tigran will be allowed to come home to us,” Yuki Gambaryan, his wife, said in a statement.



The court also ruled that keeping Gambaryan in custody would help to speed up the trial he faces. Gambaryan is being held at the Kuje Correctional Facility.



The bail hearing wasn’t the only case heard involving Gambaryan on Friday. The courts also heard the government’s charges of tax evasion, which were filed against both <a href="https://blockworks.co/tag/binance">Binance</a> and Gambaryan.&nbsp;



Read more: <a href="https://blockworks.co/news/nigeria-court-postpones-binance-case">Nigerian court postpones another Binance case to May 17</a>



In the tax evasion case, the court adjourned until May 22 for arraignment after prosecutors filed an amended charge.&nbsp;



The court adjourned until May 23 in the case charging Binance and Gambaryan with money laundering, following a request from Gambaryan’s lawyers.&nbsp;



The first witness, Nigerian Securities and Exchange Commission’s Abdulkadir Abbas, took the stand in the case and will be cross-examined by Gambaryan’s lawyers when the court’s in session next week.



“We are deeply disappointed that Tigran Gambaryan, who has no decision-making power in the company, continues to be detained,” a Binance spokesperson told Blockworks.



“Tigran has been dedicated to public service and fighting crime for most of his life. These charges against him are completely meritless. He should be freed while discussions continue between Binance and Nigerian government officials.”



Binance came <a href="https://blockworks.co/news/nigerian-government-binance-fine">under scrutiny</a> by <a href="https://blockworks.co/tag/nigeria">Nigeria</a> earlier this year. Gambaryan and his colleague Anjarwalla <a href="https://blockworks.co/news/binance-comments-on-exec-nigeria-detention">flew to meet with the government</a> and were later detained.&nbsp;



Binance has since <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">ended support</a> for the Nigerian naira.



Garba Umar of Interpol Africa said earlier this month that the <a href="https://blockworks.co/news/nigeria-court-postpones-binance-case">agency drafted paperwork</a> for Nadeem Anjarwalla, though a red notice — which informs law enforcement that the individual is wanted for arrest — has yet to be filed.&nbsp;



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Binance executive denied bail in Nigeria

The money laundering trial against Binance and two of its executives — Tigran Gambaryan and Nadeem Anjarwalla — was delayed until May 17.&nbsp;



The postponement was confirmed to Blockworks by a family spokesperson for Gambaryan, who’s been detained in the country since late February.&nbsp;&nbsp;



The postponement is just the latest development in a series of delays for Gambaryan, who was sent — by a Nigerian court — to the Kuje Correctional facility. The notorious prison was attacked as part of a jailbreak by the Islamic State two years ago.&nbsp;



Thursday’s adjournment, which specifically focuses on the money laundering charges, pushed the court date back. Binance, Anjarwalla and Gambaryan also face a second trial — this time for tax evasion — which was delayed to May 17 back in April.



Read more: <a href="https://blockworks.co/news/binance-comments-on-exec-nigeria-detention">Binance ‘deeply disappointed’ about the ongoing detention of an executive in Nigeria</a>



The decision came after a lawyer for <a href="https://blockworks.co/tag/binance">Binance</a> said they had not yet been served with documents necessary for case preparation, according to <a href="https://www.reuters.com/business/finance/nigeria-court-adjourns-binance-execs-trial-may-17-2024-05-02/">Reuters</a>.&nbsp;



Gambaryan’s bail hearing is also set for May 17.&nbsp;



Binance didn’t immediately return a request for comment.&nbsp;



Earlier this week, Garba Umar of Interpol Africa said that his agency had paperwork for Anjarwalla and was working on it. However, a red notice — which tells law enforcement that an individual is wanted for arrest — has not yet been issued for Anjarwalla, according to Interpol’s <a href="https://www.interpol.int/en/How-we-work/Notices/Red-Notices/View-Red-Notices">site</a>.&nbsp;&nbsp;



“The process is ongoing,” Umar told a local TV station on Tuesday.



The relationship between Binance and <a href="https://blockworks.co/tag/nigeria">Nigeria</a> deteriorated earlier this year, and the crypto exchange has since <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">ended support for the Nigerian Naira</a>. Nigeria, on the other hand, threatened fines against Binance after it claimed that <a href="https://blockworks.co/news/nigerian-government-binance-fine">$26 billion passed through</a> Binance Nigeria.



The company has <a href="https://blockworks.co/news/binance-employees-detained-nigeria">previously said</a> that the executives have “no decision-making power in the company.” A spokesperson called the decision to send Gambaryan to Kuje “outrageous.”



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Nigerian court postpones another Binance case to May 17

Binance executive Tigran Gambaryan pleaded not guilty to charges of tax evasion and money laundering in Nigeria on Monday.&nbsp;



According to a press release from a family spokesperson for the Gambaryans, the Nigerian court ordered Gambaryan to be remanded at the Kuje correctional facility. In 2022, the Islamic State attacked the facility as part of a jailbreak.



“I am begging the American government to do anything to get Tigran out and I am imploring the Nigerian government to realize that they are holding a completely innocent man. They can still do the right thing and release him whilst they negotiate with the actual decision-makers at Binance for a solution to the issues which they are facing,” Yuki Gambaryan, his wife, said in a statement.



Read more: <a href="https://blockworks.co/news/binance-adds-independent-board-members">Binance adds 3 independent members to its board</a>



A Binance spokesperson told Blockworks that the company is “deeply disappointed that Tigran Gambaryan, who has no decision-making power in the company, continues to be detained. Tigran has been dedicated to public service and fighting crime for most of his life. These charges against him are meritless.”



“He should be freed while discussions continue between <a href="https://blockworks.co/tag/binance">Binance</a> and Nigerian government officials,” the spokesperson added. The decision to send Gambaryan to the Kuje correctional facility is “outrageous.”



Binance previously told Blockworks that it was <a href="https://blockworks.co/news/binance-employees-detained-nigeria">working “collaboratively” with the Nigerian government </a>and publicly requested Gambaryan’s release in a blog post last week.&nbsp;



Gambaryan, the company added, should not be “held responsible while current discussions are ongoing between Binance and Nigerian government officials.”



Gambaryan and another Binance executive, Nadeem Anjarwalla, were detained in the country in late February as tensions between the country and the company began to build. Anjarwalla later fled the country after escaping detention.&nbsp;



Nigeria claimed in late February that $26 billion passed through Binance Nigeria and said that it was <a href="https://blockworks.co/news/nigerian-government-binance-fine">looking to impose a fine.</a>



The charges, and the Binance employee’s pleading, come after a drawn-out court process.



Last week, the Nigerian court adjourned until April 19. At the time, a family spokesperson told Blockworks that the Gambaryans hoped that the government could “sort through some of these administrative inefficiencies.”



Binance <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">ended support for the Nigerian Naira</a> last month as the country detained its two executives.&nbsp;



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Binance ‘deeply disappointed’ about the ongoing detention of an executive in Nigeria

An executive detained by Nigeria for weeks escaped custody on Friday.&nbsp;



Nadeem Anjarwalla, the regional manager for Africa, was detained in late February alongside Binance’s head of financial crime compliance, Tigran Gambrayan.&nbsp;



Neither executive has been charged with a crime. A Nigerian court last week decided to postpone a decision on a detention extension until April 5, according to a representative for the executives.&nbsp;



Binance, in a statement to Blockworks, confirmed that it had been “made aware” that Anjarwalla was no longer in Nigerian custody.&nbsp;



“Our primary focus remains on the safety of our employees and we are working collaboratively with Nigerian authorities to quickly resolve this issue,” a <a href="https://blockworks.co/tag/binance">Binance</a> spokesperson said.



Binance told Blockworks in mid-March that it was hoping for a “swift resolution” to the detention of Anjarwalla and Gambrayan.&nbsp;



Read more: <a href="https://blockworks.co/news/nigerian-government-binance-fine">Binance’s woes in Nigeria continue to mount</a>



Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-03-25/nigeria-announces-charges-against-binance-after-executive-flees">reported</a> Monday morning that <a href="https://blockworks.co/tag/nigeria">Nigeria</a> also filed tax evasion charges against Binance. According to a statement seen by the publication, Binance was accused of “nonpayment of value-added tax and company income tax, failure to file tax returns and complicity in aiding customers to evade taxes” through the platform.



Nigeria’s Federal Inland Revenue Service didn’t immediately return a request for comment to confirm the charges. Binance didn’t return a request for comment on the charges.



Nigeria targeted Binance in late February, alleging that $26 billion had been passed through Binance Nigeria, according to the country’s central bank governor. Binance then <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">ended support for the Naira in early March</a>.



Officials in the country previously said that they were weighing fines against the crypto exchange. One official, in an interview with BBC’s pidgin language service, even said that the government was looking at a $10 billion fine. However, Binance told local media that it was not in talks with the government over a fine of that sum.



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Binance ‘made aware’ of executive who fled Nigeria

Binance’s problems in Nigeria continue as two employees remain detained in the country.&nbsp;



Authorities in Nigeria asked a court in the capital of Abuja to extend the detention of two executives who have been held since Feb. 26.



Officials sought to extend the court order allowing the executives to be held, which lasted 14 days.&nbsp;



Binance’s head of financial crime compliance, Tigran Gambrayan, and Nadeem Anjarwalla, the regional manager for Africa, are being detained in the country. They have not been charged with any crimes.&nbsp;



Read more: <a href="https://blockworks.co/news/nigeria-binance-warning">Nigeria’s SEC issues second ‘Binance’ investor warning, cites exchange website</a>



Earlier this week, in a joint statement, the wives of the two executives said, “We don’t understand how keeping [Gambrayan and Anjarwalla] — and us — in this nightmare is going to help resolve whatever issues the Nigerian government has with <a href="https://blockworks.co/tag/binance">Binance</a>. We just want our husbands home and we are pleading with the Nigerian authorities to release them immediately and for Tigran and Nadeem’s respective governments to do more to get their citizens home.”



A hearing is set for March 20 after lawyers for the executives argued that they shouldn’t be detained. Nigerian officials were given three days to respond to the arguments from the lawyers, according to a representative for the families.



“While it is inappropriate for us to comment on the substance of the claims at this time, we can say that we are working collaboratively with Nigerian authorities to bring Nadeem and Tigran back home safely to their families. They are professionals with the highest integrity and we will provide them all the support we can. We trust there will be a swift resolution to this matter,” a Binance spokesperson told Blockworks.



The dispute between Binance and Nigeria <a href="https://blockworks.co/news/nigerian-government-binance-fine">started in late February</a> after the country’s central bank governor, Olayemi Cardoso, named Binance in a press conference and said that $26 billion passed through Binance Nigeria.&nbsp;



Then, another official said that the country was looking to impose a fine. Following the reports around the back and forth between the two, Binance <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">announced that it was ending support for the naira</a>.&nbsp;&nbsp;



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Binance says it’s working ‘collaboratively’ with Nigerian authorities 

Binance said it’s discontinuing all Nigerian naira services following reports that Nigeria was investigating the company and contemplating actions against it.&nbsp;



Binance said Tuesday that it would stop accepting naira deposits starting March 5, and would not allow withdrawals of NGN starting Friday.



“Users are encouraged to withdraw NGN, trade their NGN assets or convert NGN into crypto prior to the discontinuation of these NGN services,” Binance’s announcement said.&nbsp;



If users don’t withdraw their naira before Friday, <a href="https://blockworks.co/tag/binance">Binance</a> said it’ll be converted to <a href="https://blockworks.co/price/usdt">USDT</a>. 



“​​We thank you for your support as we continue to build the crypto ecosystem in a way that promotes transparency and long-term, sustainable growth,” the announcement said.



Read more: <a href="https://blockworks.co/news/nigerian-government-binance-fine">Binance’s woes in Nigeria continue to mount</a>



The announcement comes after several reports that <a href="https://blockworks.co/news/nigerian-government-binance-fine">Nigeria was looking to crack down on Binance</a>. Last Friday, a government official said the country was looking to impose a fine of up to $10 billion on Binance, however, the company told a local media outlet that it hadn’t heard about a $10 billion fine. 



The official then said his quotes to BBC’s pidgin language service had been misrepresented and that he hadn’t said the fine would definitely be $10 billion. 



Other government officials <a href="https://punchng.com/reps-summon-binance-boss-over-alleged-terrorism-financing/">reportedly</a> summoned CEO Richard Teng to appear in front of the House of Representatives to address allegations, with Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-02-29/ngn-usd-nigeria-detains-binance-executives?leadSource=uverify%20wall&amp;sref=3REHEaVI">reporting</a> that Binance could face formal allegations of currency manipulation, tax evasion and illegal operations.



Two executives were reportedly detained last week, though a spokesperson clarified to the media outlet that they hadn’t been formally arrested.&nbsp;



<a href="https://blockworks.co/tag/nigeria">Nigeria</a>’s central bank governor, Olayemi Cardoso, <a href="https://africa.businessinsider.com/local/markets/over-dollar26-billion-passed-through-binance-nigeria-from-unknown-sources-cardoso/j2lwlz8">named</a> Binance in a press conference at the end of February, claiming that $26 billion passed through Binance Nigeria. 



Binance didn’t respond to multiple requests for comment about the ongoing situation.



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Binance ends Nigerian naira services in wake of scrutiny

Binance’s woes in Nigeria continue to mount. 



There was confusion on Friday as a government official, in an interview with BBC’s pidgin language service, <a href="https://www.bbc.com/pidgin/articles/c25817r8wk8o">said</a> the government was looking to impose a fine of up to $10 billion on Binance.



However, a spokesperson told the People’s Gazette that the exchange was not in talks with the government about a fine of that sum.



Binance did not immediately return multiple requests for comment.



“We recently discussed ways to resolve issues with Nigeria, but we did not hear any demand for $10 billion,” a <a href="https://blockworks.co/tag/binance">Binance</a> spokesperson <a href="https://gazettengr.com/nigerian-govt-lied-no-discussion-about-10-billion-fines-we-wont-pay-ransom-or-damages-if-asked-binance/">reportedly</a> told the People’s Gazette.



Read more: <a href="https://blockworks.co/news/binance-changpeng-zhao-sentencing-delay">Former Binance CEO’s sentencing delayed until April</a>



The government official quoted by BBC said later Friday that his comments were misrepresented.



Bayo Onanuga, a spokesperson for President Bola Tinubu, told the People’s Gazette that Nigeria “may impose heavy fines on Binance for what happened.”



“I never said Binance had been informed about the fines or that it would definitely be $10 billion,” he reportedly added.&nbsp;&nbsp;



Earlier this week, two Binance executives were detained in the country, according to multiple media <a href="https://www.ft.com/content/333309a5-196c-494a-8d68-506f6a19ba81">reports</a>.



Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-02-29/ngn-usd-nigeria-detains-binance-executives">reported</a> that the two have not yet been charged, but could reportedly be charged with tax evasion, illegal operations and even currency manipulation. The report cited unnamed sources.&nbsp;



Read more: <a href="https://blockworks.co/news/irs-rising-crypto-tax-evasion-cases">Crypto tax evasion cases are on the rise: Bloomberg</a>



<a href="https://blockworks.co/tag/nigeria">Nigeria</a> reportedly began cracking down on some crypto exchanges late last week. On Thursday, Feb. 22, the exchange confirmed to Blockworks that some users had trouble accessing Binance’s website.



“We remain committed to adhering to applicable local regulations and laws, with a dedicated focus on maintaining active engagement with all relevant stakeholders, regulators and policymakers,” a Binance spokesperson told Blockworks at the time.



All of this comes after Nigeria’s central bank governor Olayemi Cardoso named Binance in a press conference last week. Cardoso said that $26 billion has passed through Binance Nigeria, according to multiple media <a href="https://africa.businessinsider.com/local/markets/over-dollar26-billion-passed-through-binance-nigeria-from-unknown-sources-cardoso/j2lwlz8">reports</a>.&nbsp;



He said the sum came from “sources and users who we cannot adequately identify.”&nbsp;&nbsp;&nbsp;



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Binance’s woes in Nigeria continue to mount

Nigeria’s Securities and Exchange Commission issued a warning warning targeting a company — Binance Nigeria Limited — operating under the same name as Binance as an unregulated and unregistered exchange.



Because the company is operating without any regulatory oversight, the SEC warned that “any member of the investing public dealing with the entity making such solicitation is doing so at his/her own risk.”



This is the second <a href="https://sec.gov.ng/circular-on-the-activities-of-binance-nigeria-limited/">warning</a> the Nigerian regulator has made, though the SEC’s latter notice specifically targeted Binance.com, which is the URL of the global exchange and not Binance Nigeria Limited.&nbsp;



Blockworks requested clarity from the Nigerian SEC but did not hear back before publication.



“The Commission again reiterates that the activities of Binance, https://www.binance.com and any such other platform through which the Company solicits investors is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal,” the July notice said.



In early June, the SEC said it was made aware of Binance Nigeria Limited and ordered the entity to “immediately stop soliciting Nigerian investors in any form whatsoever.”



The second <a href="https://sec.gov.ng/warning-against-investing-with-binance/">warning</a> echoes the June order of asking “platform providers, making such solicitations” to stop soliciting investors in Nigeria.



“We are aware of the circular, however, the entity mentioned in the circular is not affiliated with us. We are therefore seeking clarity from the Nigerian SEC and remain committed to working with them cooperatively on the next steps,” a Binance spokesperson told Blockworks in an email.



“Most importantly, we want to remind users that their assets on Binance are safe, accessible and secure. Our greatest priority will always be to deliver for our users.”



Binance did not immediately respond to a request for comment on the warning issued by its impersonator.



Outside of Nigeria, the real Binance has struggled with the regulatory environment in Europe and the US — despite the fact that Binance.US, not Binance, operates in the US.



Back in June, French authorities made an <a href="https://blockworks.co/news/binance-france-on-site-visit">on-site visit to Binance</a> as reports claimed that the global exchange was facing an investigation by French authorities. The global exchange, however, said that the on-site visit was “part of regulatory obligations to which all financial institutions must adhere.” It added that it spent “considerable time” and resources cooperating with “law enforcement globally.”



Binance has also withdrawn from multiple European countries as it struggles with registration. Europe recently passed the Markets in Crypto Assets Act (MiCA), which aims to regulate the crypto industry.



Last week, Binance “proactively” withdrew its application to operate in Germany, though earlier reports had stated that BaFin — Germany’s regulatory agency — had declined to issue a license last month.&nbsp;



In June, Binance also announced its plans to exit the <a href="https://blockworks.co/news/binance-leaves-netherlands-cyprus">Netherlands</a> and <a href="https://www.cysec.gov.cy/en-GB/entities/crypto-asset-services-providers-casps/casp-register/93362/">Cyprus</a>.&nbsp;



It’s not all bad news for Binance, however, as it did announce that it was <a href="https://blockworks.co/news/binance-dubai-operational-license">one step closer to receiving full approval from Dubai’s regulatory agency</a>. The Virtual Asset Regulatory Authority issued Binance a minimum viable product license on Monday, meaning that it will only need to receive a full market product license to offer more authorized services.



Updated Aug. 1, 2023 at 1:15 pm ET: Added context from the Nigerian SEC circular, including the citation of Binance&#8217;s official website. Headline updated to reflect change.



Updated July 31, 2023 at 5:19 pm ET: Added statement from Binance.



Updated July 31, 2023 at 10:38 am ET: Corrected to clarify that Binance Nigeria Limited is an entity with no ties to the real Binance.



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Nigeria’s SEC issues second ‘Binance’ investor warning, cites exchange website

James Cirrone

On Tuesday, ConsenSys published a survey in partnership with YouGov, focusing on crypto and Web3. The survey findings suggest a contrast between countries with developed economies and those with emerging economies.



The <a href="https://consensys.io/insight-report/web3-and-crypto-global-survey-2023">survey</a> polled over 15,000 people aged 18 to 65 in late April through May of this year. The respondents were also spread out among 15 different nations across Africa, the Americas, Asia and Europe.&nbsp;



A healthy supermajority, 92%, were aware of crypto, but that’s where the similarities ended.&nbsp;



Respondents from developing nations were generally more optimistic on crypto, while developed nations were decidedly more skeptical.&nbsp;



Nigerians were quite keen on owning crypto as a store of value, with 65% of Nigerians feeling this way.&nbsp;



For crypto investors in the US, Germany and the UK, the reasons for owning digital currencies were a bit different.&nbsp;



Americans, Germans and Brits all said one of their top reasons for investing in crypto was because they were “curious” and had a desire to educate themselves on the industry through “experimenting,” a ConsenSys spokesperson told Blockworks.



And 56% of Argentinians were motivated to own crypto for the same reason. They reported feeling that their “local currency is too unstable.” The Argentine peso has reached over 114% inflation, <a href="https://www.nytimes.com/2023/06/19/world/americas/argentina-inflation-peso-restaurants.html">according</a> to the New York Times.&nbsp;



This is something Circle CEO Jeremy Allaire expanded on in a recent Bloomberg <a href="https://www.youtube.com/watch?v=mhvcWogKhTQ">interview</a>, telling the outlet that he sees “enormous demand for digital dollars in emerging markets.”



Allaire was speaking on the news about Circle <a href="https://www.circle.com/en/pressroom/circle-singapore-obtained-major-payment-institution-license">obtaining</a> a license to offer its stablecoin services in Singapore. He noted that Asia has the most demand for such services, which could partially explain why the survey found that respondents from Asian nations were among the most likely to invest in crypto over the next 12 months.



Respondents were also asked which three concepts they most closely associated with crypto. With twelve possible answers, 38% said crypto either makes them think of “the future of money,” an “alternative to the traditional financial ecosystem,” or “the future of digital ownership.”



Broken down further by nationality, 58% of Nigerians, 50% of South Africans, and 44% of Mexicans believe to a certain extent that crypto is the future of money.&nbsp;



Among the Germans and Brits who were polled, less than 20% of them thought the same.&nbsp;



Similarly with NFTs, which is a way <a href="https://blockworks.co/news/how-to-buy-an-nft">some people are trying to create value and get compensated on the internet</a>, developing nations such as Nigeria, South Africa and Vietnam are most familiar with the concept of NFTs.&nbsp;



The most stark comparison on <a href="https://blockworks.co/news/75-percent-crypto-holders-own-nfts">NFTs</a> comes between British and Vietnamese respondents. UK residents were not likely to have owned an NFT, with 76% of them never having bought one. Only 24% of Vietnamese residents reported never having owned an NFT.



However, there was one common thread throughout the survey. Nigeria is by far and away the most bullish on crypto, despite the fact that <a href="https://blockworks.co/news/nigeria-tokenized-securities-crypto">crypto trading is severely limited in the country</a>.



A whopping 70% of Nigerian respondents correctly guessed the definition of a blockchain, which ConsenSys defined as “a secure, decentralized and transparent digital ledger that records and verifies transactions.” Only 36% of Americans and 30% of British residents cracked the right definition.



Also, nearly 80% of Nigerians said they understand what crypto is, with only 1 in 3 people having the same level of understanding in Indonesia and Japan. 



That tracks with the fact that Nigerians have the highest level of crypto ownership, according to the survey. They blow the next highest owners out of the water, which are South Koreans and South Africans. 



Nigeria is also one of the few countries with an active CBDC program, and <a href="https://blockworks.co/news/cbdc-results-may-vary">its citizens haven’t been very receptive to the economic change</a>.



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Attitudes on crypto are geographically divided, ConsenSys survey finds

Casey Wagner

In Nigeria, the country&#8217;s Securities and Exchange Commission (SEC) has opened the door for tokenized asset exchanges, but crypto trading is yet to receive the greenlight.&nbsp;



President Muhammadu Buhari’s special assistant on digital and new media, Tolu Ogunlesi, announced on Twitter this week that the country has “formally approved blockchain use.”&nbsp;



Nigeria has historically limited access to crypto trading by restricting many centralized exchanges and bank access to crypto — which the <a href="https://www.cbn.gov.ng/Out/2021/CCD/Volume%203%20Number%202%20CBN%20Update%20February%202021.pdf" target="_blank" rel="noreferrer noopener">central bank</a> banned in 2021 — but there are some platforms available to residents.&nbsp;



<a href="https://blockworks.co/news/why-emerging-markets-are-leading-the-charge-on-cbdcs" target="_blank" rel="noreferrer noopener">Emerging markets have taken a unique interest</a> in cryptocurrencies in recent years in the face of economic distress, particularly with the development of central bank digital currencies.&nbsp;



Data provider <a href="https://es.statista.com/outlook/dmo/fintech/digital-assets/cryptocurrencies/nigeria" target="_blank" rel="noreferrer noopener">Statista</a> is calling for a 1% user penetration rate for cryptocurrency in Nigeria in 2023, and predicts this will go to 3% by 2027.&nbsp;



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">BREAKING: The Federal Executive Council today approved <a href="https://twitter.com/FMoCDENigeria?ref_src=twsrc%5Etfw">@FMoCDENigeria</a>’s National Policy on Blockchain. What this means is that <a href="https://twitter.com/NigeriaGov?ref_src=twsrc%5Etfw">@NigeriaGov</a> has now formally approved blockchain use in Nigeria. Relevant agencies are now expected to develop appropriate usage &amp; regulatory frameworks.&mdash; tolu ogunlesi (@toluogunlesi) <a href="https://twitter.com/toluogunlesi/status/1653769481691299840?ref_src=twsrc%5Etfw">May 3, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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“When the Turkish lira lost 40% of its value amidst hyperinflation in 2022, Turks turned to Bitcoin and USDT as a safe haven,” Bankless newsletter writer Donovan Choy said.&nbsp;



“The same is true for millions of desperate Venezuelans, Afghans, Argentinians, Ethiopians, or Nigerians whose ability to exit their hyperinflationary domestic currencies has been suppressed by Western financial sanctions or authoritarian local currency controls.”&nbsp;



Nigeria has historically been on the forefront of blockchain adoption. The nation launched its <a href="https://blockworks.co/news/nigeria-cbdc-push-limits-cash-withdrawals" target="_blank" rel="noreferrer noopener">eNaira CBDC pilot</a> in October 2021.



In December 2022, the country limited cash withdrawals in an effort to increase CBDC adoption and use of digital banking channels — a move met with <a href="https://www.theguardian.com/world/2023/feb/15/angry-protests-erupt-across-nigeria-against-scarcity-of-cash">riots</a> and protests in February.



“Customers should be encouraged to use alternative channels…to conduct their banking transactions,” the central bank said in a statement. Those include internet banking, mobile banking apps, debit cards and the country’s CBDC, the eNaira, among other means.



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Nigeria SEC Okays Tokenized Assets, but Crypto Will Have to Wait 

Bessie Liu

Countries are looking to build their own central bank digital currency — though results may vary. 



Roberto Campos Neto, president of Brazil’s central bank, said at BTG Pactual’s CEO Conference on Friday that the pilot for his country’s digital currency will “start right now.”



The project is likely to be ready for its rollout by December of this year.&nbsp;



Banks have been widely cooperative with the project, according to Campos Neto, who added that central bank digital currency (<a href="https://blockworks.co/tag/cbdc" target="_blank" rel="noreferrer noopener">CBDC</a>) implementation will allow each bank to individually issue the state-sanctioned digital asset.



Alongside the development of digital currencies, the Brazil banking head referred to two other prominent projects said to shape the future of finance: PIX, a fiat payments initiative, and <a href="https://ob-public-files.s3.amazonaws.com/20221003_Biannual_Report_OFB.pdf" target="_blank" rel="noreferrer noopener">Open Finance</a> — a project founded on the principle that customers should own their own financial data.



“I think these three things can change the history of financial intermediation in Brazil, transforming our system into something efficient and today in the world there is no one so advanced,” Campos Neto said.



In Japan — which has been notoriously strict on cryptocurrencies — the country’s central bank is planning to pilot its “digital yen” in April.



Proof of concepts will be executed in March to test feasibility and basic functionality, the Bank of Japan said in a <a href="https://www.boj.or.jp/en/paym/digital/dig230217b.pdf" target="_blank" rel="noreferrer noopener">statement</a>.



Private businesses and banks — including three of Japan’s largest banks — will participate in the trial. Transactions are set to to be simulated, meaning no actual retail and consumer transactions are designed to be made during the pilot.



“Whether to issue a CBDC should be decided by discussions among the Japanese public,” the Bank of Japan said. “With a view to facilitating such discussions, the [bank] will continue to make thorough preparations to respond to changes in circumstances in an appropriate manner.” 



Other CBC programs have fared quite differently. Nigeria’s CBDC program has been called “a dark experiment…with deadly consequences.”



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">A very dark experiment is under way in Nigeria, with deadly consequences. Since October 2021, 99.5% of Nigerians have refused to use the central bank&#39;s digital currency, the so-called e-Naira, preferring to continue using cash. So what did the central bank do? It doubled down.&mdash; Nick Corbishley (@NickCorbishley) <a href="https://twitter.com/NickCorbishley/status/1626183018791464962?ref_src=twsrc%5Etfw">February 16, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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The eNaira first launched in October 2021, meeting a chilly reception from Nigerians. It <a href="https://blockworks.co/news/cbdc-project-gives-private-players-unfair-advantage">hasn’t been the only hurdle</a> CBDCs around the world have gone up against.&nbsp;



After the country’s citizens <a href="https://blockworks.co/news/nigeria-cbdc-push-limits-cash-withdrawals">balked at adopting the eNaira and continued to use cash,</a> its central bank began to replace high denomination cash bills in the economy, Nick Corbishley, a financial journalist, <a href="https://twitter.com/nickcorbishley/status/1626183018791464962?s=46&amp;t=7Yb6Crzn9zFgNAGe5mcsNg" target="_blank" rel="noreferrer noopener">tweeted</a>. 



The sentiment led to businesses shuttering and angry protests, he said.



“Unless stopped in its tracks, this monetary experiment is coming to all of us, one way or another,” Corbishley tweeted.



About 114 countries <a href="https://blockworks.co/news/ukraine-bank-finds-stellar-blockchain-brings-key-advantages">have explored CBDCs</a>, according to Atlantic Council’s CBDC tracker. Eleven countries have fully implemented a digital currency, and 17 have CBDCs in the works.



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CBDCs Are Gaining Steam, Though Results May Vary

Sebastian Sinclair

The Central Bank of Nigeria is attempting to drum up the use of its central bank digital currency, or CBDC, by enforcing limits on the amount of cash citizens can withdraw from their local banks.



Nigeria’s central bank asked deposit banks and financial institutions to cap over-the-counter maximum cash withdrawals for individuals to $224 a week, in a <a href="https://www.cbn.gov.ng/Out/2022/CCD/RevisedCashWithdrawal.pdf" target="_blank" rel="noreferrer noopener">directive</a> issued on Tuesday, 



Corporate organizations&#8217; free withdrawals will also be limited to $1,154 per week, the bank said. Withdrawals above those limits will attract processing fees of 5% and 10% respectively. 



“Customers should be encouraged to use alternative channels…to conduct their banking transactions,” the bank said. Those include internet banking, mobile banking apps, debit cards and the country&#8217;s CBDC, the eNaira, among other means.



Central Bank Governor Godwin Emefiele conceded in October that his institution couldn’t account for the use of 85% of Nigeria’s cash in circulation, <a href="https://www.bloomberg.com/news/articles/2022-10-27/cash-clampdown-in-nigeria-seeks-to-curb-currency-hoarding-kidnappings" target="_blank" rel="noreferrer noopener">Bloomberg reported</a>. That, in effect, was jeopardizing monetary policy across the cash-hungry nation of Africa’s largest economy, he said at the time.



The West African nation has also struggled to deal with individuals hoarding cash as it attempts to counter illegal activity, including theft and kidnappings.



Under the directive, a $44 per day limit would apply to those individuals seeking to withdraw from ATMs while over-the-counter third-party checks exceeding $112 would not be accepted.



In rare circumstances, where individuals or organizations require cash for “legitimate” purposes, a limit of $11,226 and $22,452 will apply respectively.&nbsp;



Those will also be limited to one withdrawal per month and subject to rigorous identification and document requests including presenting a driver&#8217;s license and approval by the bank authorizing the withdrawal, among other things.



Nigeria became the first African nation to launch a retail central bank digital currency <a href="https://www.imf.org/en/News/Articles/2021/11/15/na111621-five-observations-on-nigerias-central-bank-digital-currency" target="_blank" rel="noreferrer noopener">in October 2021</a>, with a design aimed at complementing physical cash but not replacing it entirely.



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Nigeria Limits Cash Withdrawals in CBDC Push

<div id="highlights-block_628fba706c69f" class="highlights">
 <ul>
 <li>Emerging markets see potential in central bank digital currencies for increasing financial inclusion and decreasing cash dependency</li>
 <li>Infrastructure and privacy concerns continue to be top barriers</li>
 </ul>
 
</div>



With more than half of central banks worldwide working on digital currency initiatives, the US dollar-dominated payment network may in relatively short order become a thing of the past, according to the <a href="https://www.bis.org/publ/bppdf/bispap123.htm" target="_blank" rel="noreferrer noopener">Bank for International Settlements</a>.&nbsp;



Emerging markets are at the forefront of the central bank digital currency (CBDC) movement, industry leaders say, a trend attributed to these economies having more pressing, fundamental needs than those of more developed markets.&nbsp;



“Emerging economies appear to view CBDCs as a way to jump start their economies,” said Steve Aschettino, a Norton Rose Fulbright partner concentrating on fintech. “More-developed nations have existing and widely adopted electronic payment mechanisms already in place. While one may say this is an advantage, their existing payments technology can also serve as a barrier to the creation and broad adoption of a CBDC.”



Emerging markets looking into CBDCs have similar goals and motivations, the BIS said in a <a href="https://www.bis.org/publ/bppdf/bispap123_a_rh.pdf" target="_blank" rel="noreferrer noopener">report</a> earlier this month.&nbsp;



“Providing a cash-like digital means of payment, in light of reduced cash usage and an increase in private digital payment services, is the most common consideration,” the report said. “Other significant considerations include strengthening competition among payments service providers (PSPs), increasing efficiency and reducing the costs of financial services.”&nbsp;



<a href="https://cms.blockworks.co/jamaica-to-launch-cbdc-this-summer/" target="_blank" rel="noreferrer noopener">Jamaica</a>, Brazil, Nigeria and Haiti are among the countries currently looking into establishing or expanding CBDC pilots. For cash-driven economies such as Jamaica, CBDCs allow for cheaper, safer and more efficient transactions, Central Bank of Jamaica Governor Richard Byles said.&nbsp;



“If you can imagine what it costs a business, especially a high cash-volume business, to manage that cash: to keep it, to store it, to transport it — digital currencies get rid of all that,” Byles said in a recent interview.



CBDC infrastructure provider EMTECH has worked with the Bank of Ghana, the Central Bank of the Bahamas and the Central Bank of Nigeria on CBDC infrastructure projects in recent years. The company most recently partnered with HaitiPay, a Haitian fintech company, to demo a CBDC and fintech proof-of-concept in the region. The goal was to showcase the impact a CBDC can have on the Haitian economy, according to Carmelle Cadet, founder and CEO of EMTECH.  



“Being born and raised in Haiti, I have a view of how many people are unbanked and underbanked,” Cadet said. “When I discovered what blockchain was, I realized that there was a solution that could bypass where people are from and how much money they had and get them access to better financial resources.”&nbsp;



Although interest in digital currency has grown, most CBDCs are still in early pilot stages, and those that have progressed further are not yet widely used, said Kenneth Goodwin, director of regulatory and institutional affairs at Blockchain Intelligence Group. The Central Bank of the Bahamas’ Sand Dollar, which became the world’s first CBDC in 2020, has faced distribution issues, he said.



“I speak to John Rolle, who is the head of the Central Bank of the Bahamas, he&#8217;s not a big fan of the idea of all of this, quite frankly,” Goodwin said. “His job has become a lot more challenging because he&#8217;s taking this digital asset and trying to find a way to implement that into the system where they used to have a fiat currency.”&nbsp;



A huge benefit of CBDCs for central banks, Goodwin said, is the ability to better understand where — and how — people are spending. The transparency, of course, brings up privacy concerns as well.&nbsp;



“Anytime you digitize any platform, you&#8217;ll increase both cybersecurity risk and data privacy risk,” Goodwin said. “Data privacy is very, very key in terms of who owns the data, whether that data is being owned by the individual or is being owned by the central government, and that is a huge issue.”&nbsp;&nbsp;



Infrastructure is also a key concern, Aschettino said. Limited broadband access in many countries looking into CBDCs can significantly limit distribution, he said.&nbsp;



“These countries have to do a full assessment first to see that the citizens have access to the internet,” Goodwin said. “They&#8217;re going to have to do an assessment first and not get caught up with the technology, which is what often happens, they get caught up with the technology, but they don&#8217;t think about the infrastructure.”



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Why Emerging Markets Are Leading the Charge on CBDCs

<div id="highlights-block_61f7623b07be0" class="highlights">
 <ul>
 <li>Binance has restricted 281 Nigerian-based personal accounts</li>
 <li>Of those, around a third have been restricted at the request of international law enforcement.</li>
 </ul>
 
</div>



Binance, the world&#8217;s largest crypto exchange by trade volume, has restricted 281 personal Nigerian accounts with more than a third being at the behest of law enforcement.



In a <a href="https://www.binance.com/en-NG/blog/all/a-letter-from-our-ceo-to-nigerians--our-commitment-to-user-protection-421499824684903365" target="_blank" rel="noreferrer noopener">letter</a> on Saturday, Binance CEO Changpeng “CZ” Zhao said user security remained Binance&#8217;s &#8220;top priority&#8221; before citing that anti-money laundering measures and account restrictions were in place.



Around 79 other cases that were facing restrictions have been resolved while all non-law enforcement-related cases are expected to be resolved within two weeks. More Binance personnel are being deployed to expedite the matter CZ said. 



Of the 281 accounts, 38% have been restricted at the request of international law enforcement, the letter said.



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/boycottbinance?src=hash&amp;ref_src=twsrc%5Etfw">#boycottbinance</a> Binance is locking NIGERIAN accounts using P2P and related services. They locked plenty accounts already in Nigeria. My 5btc locked in binance. Use binance at ur own risk.<a href="https://twitter.com/hashtag/boycottbinance?src=hash&amp;ref_src=twsrc%5Etfw">#boycottbinance</a> <a href="https://twitter.com/hashtag/BinanceStopScamming?src=hash&amp;ref_src=twsrc%5Etfw">#BinanceStopScamming</a> <a href="https://twitter.com/hashtag/BINANCESTOPSCAMMINGNIGERIANS?src=hash&amp;ref_src=twsrc%5Etfw">#BINANCESTOPSCAMMINGNIGERIANS</a>&mdash; hoseaolu (@honetnetworks) <a href="https://twitter.com/honetnetworks/status/1487381321097830400?ref_src=twsrc%5Etfw">January 29, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Last week, users began complaining of issues on <a href="https://twitter.com/Sir_Dubem/status/1486281036812140552?s=20&amp;t=O2nCMRLRqxjEZfy9JszY0w" target="_blank" rel="noreferrer noopener">Twitter</a> revolving around Nigerian-based Binance accounts. #Binancestopscammingnigerians was seen trending before CZ responded with the letter.



In February of last year, Binance briefly suspended deposits in Nigerian naira following orders from the country central bank for local banks to close accounts linked to various cryptocurrency platforms.



Crypto is seen by many in the 190 million-strong population of Nigeria as a means to circumvent monetary controls and to serve the underbanked or unbanked. Crypto exchanges have, for quite a while, offered up a means to transact peer-to-peer at a time when more than half in the country are <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017%20Findex%20full%20report_chapter2.pdf" target="_blank" rel="noreferrer noopener">unbanked</a>.







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