Coinbase accused the SEC of choking the crypto industry through its regulation-by-enforcement approach, and also argued that the lack of clear guidelines is holding back compliance. In contrast, El Salvador's pro-Bitcoin President Nayib Bukele was re-elected, creating a lot of excitement about the future for Bitcoin and crypto in the country. Meanwhile, Nigeria's crypto sector is still faced with uncertainty under President Bola Tinubu. Despite his initial promises of legalization, the Nigerian crypto industry is riddled with tension after the government’s recent crypto crackdown and after the arrest of Binance executives on money laundering charges.
Coinbase and SEC Clash
Coinbase has accused the United States Securities and Exchange Commission (SEC) of trying to "choke" the cryptocurrency industry through its ongoing regulation-by-enforcement approach. In a May 31 filing with the U.S. Court of Appeals, Coinbase argued that the SEC is serious about the destruction of digital assets and is still not willing to establish clear and fair guidelines for the industry.
The exchange called the agency’s approach pointless and undeserved. Coinbase also stated that the SEC does not feel obligated at all to make compliance more feasible and believes its rules are workable because it has already taken legal action against several firms for rule violations.
Coinbase's filing sounds very similar to the opinions of other SEC commissioners who believe the agency is negatively influencing the growth of the digital assets industry. Hester Pierce, a pro-crypto SEC commissioner, recently suggested a cross-border sandbox program between U.S. and U.K. blockchain firms to experiment with tokenized securities. Pierce is very frustrated with the lack of action from the SEC when it comes to providing relief to those who seek it, and suggested that such a program could actually compel the SEC to take more definitive action.
Despite the SEC’s claim that its rules only present challenges for a small segment of the industry, Coinbase completely disagreed with this as this minimization does not really reflect the broader, oppressive stance of the agency.
The SEC filed a lawsuit against Coinbase in June of 2023, alleging that the exchange never registered as a broker, national securities exchange, or clearing agency, thereby evading securities laws. Coinbase wants to have the case dismissed, but the SEC has consistently fought against these attempts.
Although there was optimism in the crypto industry and among legal experts that Coinbase would secure a full dismissal, the exchange has not been successful.
1st Bitcoin President
While crypto fights for its place in the US, El Salvador's pro-Bitcoin President Nayib Bukele has been sworn in for another five-year term following a landslide victory in February. There is currently a lot of excitement from the crypto industry because fo his very positive stance towards Bitcoin.
Crypto commentator Cory Bates also celebrated Bukele’s re-election with a post, pointing out some of his achievements. Additionally, crypto media figure Pete Rizzo even called Bukele the first Bitcoin President after his inauguration at the National Palace in San Salvador.
During the ceremony, Bukele touched on the huge reduction in crime under his leadership, which was mostly due to a major crackdown on gangs. Bukele's decision to adopt Bitcoin as legal tender in September of 2021 also made El Salvador the first country to do so, despite all of the initial skepticism from a majority of Salvadorans.
Bukele's recent electoral victory saw his New Ideas party securing 54 out of 60 seats in the legislature. On Feb. 5, he declared victory even before the official results were released. This strong political backing has caught the attention of other nations, with reports suggesting that Argentina may follow El Salvador's example in adopting Bitcoin and other crypto initiatives.
Hope and Concern for Nigeria’s Crypto Future
Meanwhile, Nigeria’s crypto industry has experienced both hope and concern under President Bola Tinubu’s administration. Some believe that the government’s actions and policies have left the crypto sector without clarity over the past year. During his campaign, Tinubu pledged to legalize crypto and blockchain technology to strengthen Nigeria's fragile economy. However, the young population now feels quite bewildered by recent governmental actions against the crypto industry.
Olumide Adesina, an analyst at Quantum Economics, pointed out that there is a huge need for clarity and support to unlock the sector’s potential. He believes that recent actions, including a crackdown on peer-to-peer (P2P) trading, the arrest of a Binance executive, and accusations of currency manipulation, have cast the industry in a very negative light despite high interest from the youth in the country.
According to Nathaniel Luz, CEO of Flincap, Tinubu now has a very unique opportunity to shape the emerging crypto sector, but the administration has not done enough and more action is still needed and expected.
In May 2023, the Nigerian Securities Exchange Commission (SEC) published regulations for digital assets, suggesting a middle ground between a ban and a lack of regulation. In December, the SEC lifted its ban on banks operating accounts for crypto service providers, and the central bank acknowledged the need to regulate Virtual Asset Service Providers (VASPs).
In January, the Central Bank released initial guidelines for banks opening cryptocurrency accounts, but banks are still banned from trading or holding virtual assets in their portfolios. The guidelines include stringent Anti-Money Laundering (AML), Know Your Customer (KYC), and other measures, along with tight transaction limits and restrictions on cash withdrawals from crypto accounts.
In May of 2024, the Nigerian government started preparing new regulations to ban P2P cryptocurrency exchanges using the national currency, the Nigerian naira.
Tensions Still Run High
There is, however, still a lot of tension between Binance and regulators in Nigeria. Yuki Gambaryan, the wife of detained Binance official Tigran Gambaryan, claims that her husband is still in Kuje prison despite a court order for his transfer to a hospital for medical care.
In a recent press release, she pleaded with Nigerian authorities and President Bola Tinubu’s government to comply with the court order and transfer her husband to a hospital. Yuki called on the American government to help secure his release as well. She also shared her devastation and shock about the authorities' refusal to allow his transfer from the prison causing his illness.
Tigran Gambaryan collapsed last week while appearing before the Abuja Division of the Federal High Court on money laundering charges. He previously missed a court appearance for tax evasion charges by the Nigerian Federal Inland Revenue Service (FIRS) but attended for the money laundering charges. His legal representative, Mark Mordi, told the court on May 22 that Gambaryan had been sick since the previous trial date.
Binance Holdings legal representatives Aluko and Oyebode also shared their concerns about Gambaryan’s health in a letter to the Deputy Chief Registrar of the Federal High Court. Legal partner C.J. Caleb reported that Gambaryan received intravenous treatment for malaria and suffered from a throat infection. The ongoing renovations at Kuje Medium Correctional Facility makes it unsuitable for his medical treatment.
Gambaryan’s illness came three months after he and colleague Nadeem Anjarwalla were arrested during an official visit to Nigeria in February. Binance is facing multiple charges in Nigeria, including allegations of money laundering and tax evasion totaling $35 million.
This happened as there is currently a major crackdown by Nigerian authorities on cryptocurrencies, which they believe facilitate speculation and manipulation of the naira. This led to Binance disabling its P2P function and exiting the Nigerian market after the federal government blocked its website to Nigerian users.
