In the midst of Nigeria’s government crackdown on crypto OTC traders, Nathaniel Luz, CEO of Flincap, has expressed strong opposition to the move, attributing the falling value of the naira to broader economic issues rather than activities within the cryptocurrency industry.
Luz’s remarks come as Nigerian authorities have recently blocked online platforms of major crypto firms, including Binance, citing concerns over currency manipulation and illicit fund movements. This crackdown, according to government sources, aims to curb criminal activities allegedly contributing to the depreciation of the naira.
However, Luz vehemently opposes this narrative, emphasizing that blaming over-the-counter (OTC) crypto traders for the currency’s decline is misguided. “The crypto industry has not played any part in the current failing state of the economy and the fall of the naira,” Luz stated.
He further questioned the government’s inconsistent stance towards the crypto sector, noting recent reports of Nigerians resorting to virtual private networks (VPNs) to access crypto exchanges despite the lifting of the 2021 crypto ban. Luz criticized the ambiguity surrounding regulatory policies, which he believes undermines trust in the government’s approach.
Luz underscored the multifaceted nature of Nigeria’s economic challenges, pointing to factors such as excessive naira supply, insufficient dollar reserves, and uncertainties surrounding foreign debt obligations. He emphasized that these systemic issues, rather than crypto trading, are the primary drivers behind the naira’s depreciation.
“The cause of the problem is apparent,” Luz asserted. “People have lost confidence in the naira, and these actions are not helping to build the people’s confidence. It is more of a trust issue.”
As of the latest update, the naira has fallen to an all-time low of ₦1,900 per dollar at the parallel market, exacerbating concerns over its stability.
In a related development, Binance, one of the largest crypto exchanges, has bowed to regulatory pressure in Nigeria by implementing a price cap on peer-to-peer (P2P) USDT sales on its platform. This move reflects the intensifying regulatory environment facing crypto firms in the country.
In conclusion, Luz called for a concerted effort to rebuild trust between the government and citizens, urging authorities to address underlying economic vulnerabilities instead of scapegoating crypto traders. “What the government should be doing right now is trying to build and buy back this trust, not worsen the situation,” Luz remarked, echoing sentiments shared by many in Nigeria’s crypto community amidst ongoing regulatory uncertainties.
