Crypto exchange OKX has announced its decision to exit the Nigerian market, citing challenges posed by local laws and regulations. This move comes on the heels of similar exits by other major crypto exchanges, including Binance, which is currently facing legal scrutiny in the country.
In an email sent to customers on Wednesday, OKX stated that, effective August 16, users would no longer be able to open new trading positions or access most of the platform's services. However, users will still be able to withdraw funds and close any existing positions.
“We are discontinuing OKX services in Nigeria following recent changes in local laws and regulations. This decision is part of our ongoing evaluation of regulatory policies in each market we operate,” the exchange explained.
OKX advised its users to take several steps before the deadline, including closing all open positions and orders in P2P, margin, perpetual, futures, and options markets. Additionally, users were instructed to cancel any outstanding spot orders in USDT, DAI, and EURT, redeem assets from Grow products like Earn, Loan, and Jumpstart, and transfer their assets to a preferred wallet.
The exchange added, “We request you to review your account and complete the necessary actions by 12:00 am (PST) on August 16, 2024.”
This decision follows increased regulatory pressure from the Nigerian government, particularly from the Central Bank of Nigeria (CBN), which has been tightening its control over the crypto market. The CBN has directed banks to identify and freeze accounts involved in cryptocurrency transactions and has prohibited regulated financial institutions from accepting or facilitating crypto payments. This directive contradicts an earlier ban that was lifted in December 2023.
The regulatory landscape for cryptocurrencies in Nigeria remains unclear, with many industry experts calling for more precise guidelines and frameworks to govern the sector. In May, the Securities and Exchange Commission (SEC) directed crypto exchanges to halt naira peer-to-peer trading, further complicating operations for platforms like OKX.
In compliance with these regulations, OKX has already disabled the peer-to-peer function for Nigerian users and delisted the naira from its platform.
Other global crypto exchanges are also facing difficulties in Nigeria. Recently, KuCoin announced the implementation of a 7.5% value-added tax (VAT) on top of its 0.1% transaction fees for Nigerian users, attributing the decision to regulatory updates in the country. The VAT applies to various transactions conducted on its platform, adding to the growing challenges faced by the crypto community in Nigeria.
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