Popular crypto exchange, OKX has announced its intention to draw the curtains of operations in Nigeria next month. According to an email sent to its Nigerian customers on Wednesday, this move is borne out of unfavourable regulatory conditions in Nigeria.
With this development, the customers are expected to withdraw their funds from OKX on or before August 16.
Recall that the Nigerian authorities have been clamping down on crypto exchanges in the country since the turn of the year citing allegations of foreign exchange market manipulation and tax evasion. Some of the crypto companies that have effected a clampdown on transactions for Nigerian users include Binance and KuCoin.
Why OKX is shutting down operations in Nigeria
According to OKX, Nigerian customers will no longer be able to open any new account on the platform from August 16. According to the email sent to customers:
“We are discontinuing OKX services in Nigeria after recent changes in local laws and regulations. This is based on our ongoing assessment of policies in each market we serve. From August 16, 2024, our customers will no longer be able to open any new positions or access any services on the platform, with the exception of withdrawals and closing/redemption of open positions. We request you to please review your account and complete applicable steps by 12:00 am (PST) on August 16, 2024.”
Clampdown on crypto exchanges
Nigerian authorities have adopted a somewhat confused and contradictory stance on crypto regulation. Since the beginning of the year, authorities have been clamping down on crypto exchanges and peer-to-peer trading platforms, in what they term a crackdown on naira manipulators.
The Nigerian authorities have been in a prolonged legal battle with the largest crypto exchange in the world, Binance, which led to the detainment of two of the exchange’s executives. Binance had to disable its p2p trading feature and other exchanges like OKX and KuCoin followed, bowing to regulatory pressure.
Although Richard Teng, Binance CEO had earlier claimed he was working closely with the Nigerian government to resolve the situation, he later announced that the Nigerian authorities were demanding bribes from its detained executives to make the money laundering trial initiated against them go away.
Two weeks ago, KuCoin announced that it would start collecting a 7.5% Value-Added Tax (VAT) on transactions by users in Nigeria. Although it is not yet clear what the source of the directive is, analysts assume that it complies with requirements from Nigerian authorities.
Also, a circular released in June by the Nigerian Securities and Exchange Commission (SEC) listed establishing an office in Nigeria as part of the eligibility requirements for companies categorised as Virtual Assets Service Providers (VASPs) in the country.
