Nathaniel Luz, the co-founder and chief marketing officer of Flincap, a local crypto over-the-counter (OTC) exchange, has raised concerns over the Nigerian government’s ambiguous stance towards the cryptocurrency industry. Recent reports of local crypto users facing difficulties accessing websites of various crypto exchanges, including Binance and OctaFX, through traditional telecommunication providers have fueled speculation about a potential government ban on crypto platforms.
In an exclusive conversation with Cointelegraph, Luz expressed dismay over what he perceives as the Nigerian government’s lack of interest in fostering a positive relationship with stakeholders in the crypto space. Luz criticized the government’s attribution of the current exchange rate of 1,800 Nigerian naira to $1 to OTC traders trading Tether for naira on the peer-to-peer (P2P) market, labeling it as misguided.
Luz vehemently refuted the notion that the local crypto industry is to blame for the economic downturn or the decline in the value of the naira. He argued that factors contributing to the country’s economic challenges, such as excess naira, insufficient supply of United States dollars, heavy reliance on imports, emigration, currency exchange dynamics, and uncertainty surrounding Eurobond payments, are unrelated to the crypto sector.
While the Nigerian government lifted the 2021 crypto ban imposed by the Securities and Exchange Commission and the Central Bank of Nigeria in December 2023, allowing crypto exchanges to apply for licenses, Luz highlighted the ongoing challenges faced by crypto startups in meeting the stringent licensing criteria. These requirements include a paid-up capital of 500 million naira ($340,000) and an application fee of 30 million naira ($20,000).
Luz argued that instead of scapegoating the local crypto ecosystem for foreign exchange issues, the Nigerian government should focus on addressing the licensing hurdles hindering the growth of local exchanges. Nigeria currently stands as the largest P2P market globally, a development that emerged following the Central Bank of Nigeria’s ban on institutions from buying and selling crypto in 2021.
Amidst growing uncertainty and speculation surrounding the Nigerian government’s position on the crypto industry, stakeholders like Nathaniel Luz advocate for a more transparent and supportive regulatory framework that fosters innovation while addressing the country’s economic challenges.
