Investor confidence in Nigeria's burgeoning Web3 sector has been shaken by recent actions against Binance executives, with concerns mounting over potential repercussions similar to those faced by the embattled exchange. Lucky Uwakwe, chairman of Nigeria's Blockchain Industry Coordinating Committee (BICCoN), highlights a growing sense of unease among investors, leading to withdrawals from deals and partnerships in the Web3 space.

In an interview with Cointelegraph, Uwakwe, who heads Nigeria’s intercommunity working group comprising Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), and Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), underscores the impact of Nigeria's perceived lack of business safety and government hostility, exacerbated by the Binance case.

The detention and subsequent legal action against Binance executives Tigran Gambaryan and Nadeem Anjarwalla in February, amidst allegations of fiat currency manipulation, have sent shockwaves through the nation's Web3 sector. Investors fear similar repercussions for local Web3 companies, prompting divestment from existing investments.

Uwakwe warns that the government's handling of the Binance issue is not only detrimental to the affected individuals but also undermines the entire industry's growth prospects. While acknowledging the possibility of acquittal for the Binance executives, Uwakwe remains skeptical, citing the government's stance and past patterns of disregarding court rulings perceived to threaten national stability.

The Nigerian government's history of friction with cryptocurrency exchanges, culminating in Binance's cessation of naira operations in March, underscores broader challenges facing the country's crypto community. Despite Nigeria's reputation as the world's most crypto-obsessed nation, the current crackdown raises concerns about the sector's future trajectory and the government's approach to regulating digital assets.