AS the cryptocurrency community continues to grow and evolve, Nigerian participants face uncertainty and unpredictability due to government crackdowns and regulatory measures.
These are seen as threatening the balance between innovation and oversight, even as the Securities and Exchange Commission (SEC) continues the process of licensing more exchanges.
The tap-to-earn crypto trend is widespread among many Nigerians, especially students in secondary schools and universities, corporate and commercial drivers, civil servants, labourers, housewives, and even beggars, who are fervently tapping away on their devices, largely oblivious to events around them. Many of these crypto enthusiasts are already looking forward to September 26, 2024, when Hamster Kombat, one of the platforms, is set for its airdrop.
The airdrop event is touted as the biggest in crypto history due to the size of its community. Hamster Kombat boasts a player base of over 300 million global participants, making it the largest play-to-earn crypto project in the industry at the moment.
Binance, the world’s largest cryptocurrency exchange, has officially announced its listing of Hamster Kombat tokens on its platform and invited the project to join the Binance Launchpool.
The listing of the Hamster token on Binance, according to analysts, comes as a huge relief to millions of Hamster players worldwide who had concerns about whether the airdrop would proceed, given the community’s enormous size. Analysts believe that Binance’s invitation to the project to join its Launchpool gives users the opportunity to earn the new HMSTR token by staking their BNB.
Binance made the announcement via its official X (formerly Twitter) page, which has 13 million followers. The tweet garnered about 10,000 retweets and over 4,000 comments. Mr. Solomon Amunde, a financial analyst, speaking on a Channel TV program monitored in Lagos, said the endorsement means Hamster will reward players for the time and data spent on the platform over the past six months or so.
“People have also spent considerable amounts of money trying to farm the project, so it’s actually positive news for them. It also means that the token will perform well once it’s listed, as Binance has the most liquidity of any centralized exchange,” Amunde stated. He added that those with deep pockets could take advantage by sending funds to Binance and farming the project through the Binance pool. “That’s the fastest and easiest way to make free money. We already have some individuals who have deposited about $10,000 and are farming the project. But for those who can’t afford to lock up that much liquidity, they can continue playing the game and look for ways within the game to farm tokens,” he said.
However, this is happening as the Federal Government of Nigeria has filed criminal charges against four Nigerian crypto dealers and several firms over allegations of conducting the business of other financial institutions without a valid banking licence, including USDT-to-Naira transactions.
The individuals—Ejiogu A. Chinedu, Nnamdi F. Okereke, Oty Ugochukwu Stanley, and Chukwuebuka F. Ogumba—along with some firms listed as their co-defendants, were sued by the Federal Government in various charge sheets and suit numbers. The government is asking the Federal High Court in Abuja to punish the defendants for allegedly violating the Banks and Other Financial Institutions Act of 2020.
Additionally, the Nigerian government froze more than $37 million worth of cryptocurrency assets held in wallets believed to be owned by some organizers of the August 2024 riots. The freezing followed an order by the Federal High Court in Abuja, presided over by Justice Emeka Nwite. The wallet holding the majority of the assets contained USDT 37 million, equivalent to the exact value in U.S. dollars.
The funds were believed to be in accounts held by users of the crypto platforms ByBit and KuCoin. The anti-corruption body alleges that these platforms contributed to the recent devaluation of the Naira and market manipulation, resulting in the currency’s loss of value against others.
Despite the clampdown, Emonotimi Agama, Director-General of the Securities and Exchange Commission (SEC), recently disclosed that 50 cryptocurrency exchanges have applied for operational licenses following the government’s change in stance on digital assets.
In August, the SEC announced that it had granted approval in principle to two digital asset exchanges to begin operations under its Accelerated Regulatory Incubation Program (ARIP). Five additional firms were admitted to test their models and technology under the Regulatory Incubation Program (RI).
The approved firms include Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd. The ARIP was introduced by the SEC to onboard firms that had already begun operations before the release of the Rules on Virtual Asset Service Providers in May 2022. The RI program, on the other hand, was designed to evaluate the business models of digital asset firms and allow them to test their products, services, and technology in a real-world market environment under the regulator’s close supervision.
The SEC noted that additional license applications are being assessed, and approvals in principle will be granted on a case-by-case basis once the requirements are met. “Our work at the SEC is to protect investors and foster market development,” Agama said, emphasizing that while the commission welcomes innovation, businesses must meet regulatory and compliance requirements to ensure the growth of a stable and sustainable digital economy.
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