Coinspeaker OKX Exchange to Exit Nigeria amid Regulatory Challenges
Renowned cryptocurrency exchange OKX is reportedly closing down its services for Nigerian uses. A company’s spokesperson stated the company has decided to exit the country on August 30, citing regulatory issues.
The notice states that OKX aims to strictly follow all laws in every country where it offers its services. The spokesperson explains:
“Due to local laws and regulations, we notified local customers that we would no longer offer services to customers in Nigeria from August 30.”
Nigerian OKX users will not be able to access their accounts after the specified date. The company promises that users’ funds stay safe even with this service suspension. Before this deadline, OKX has urged locals to withdraw or transfer money, as remaining funds may be subject to further restrictions based on its Terms of Service.
This move follows OKX’s earlier halt of withdrawal services for the Nigerian Naira in May brought about by increased regulatory scrutiny by the government. Previous reports stated that starting August 16, Nigerian OKX users would not be able to open new positions, accounts, or access services on the exchange.
Crypto Regulation for Exchanges
In Nigeria, Financial Virtual Asset Service Providers (VASPs) including wallet providers and crypto exchanges must follow strict regulations. This covers securing a license from the SEC, registering with the Corporate Affairs Commission (CAC), and keeping a minimum paid-up capital of $553,000.
Exchanges also have to report doubtful transactions, collect the Bank Verification Number (BVN) of owners of cryptocurrency businesses, and confirm user identities using Know Your Customer (KYC) processes.
Exchanges are also mandated to establish a physical presence in Nigeria and ensure the security of user data, promptly reporting any breaches. Non-compliance with these regulations can lead to severe consequences, such as hefty fines, revocation of registration, or a complete ban on operations.
Exiting Nigeria
The strict regulatory system in Nigeria has already impacted other major players in the crypto industry. For instance, Binance removed support for the Nigerian Naira in March. The exchange has faced legal challenges in Nigeria, including allegations of money laundering and tax evasion. The matter worsened with the detention of Binance executives even though the tax charges were finally dropped.
Tigran Gambaryan, Binance’s head of financial crime compliance, along with Nadeem Anjarwalla, a Binance regional executive, were detained upon their arrival in Nigeria in February. While Anjarwalla managed to escape custody, Gambaryan remained detained. The latter is reportedly suffering from poor health due to malaria and pneumonia.
In May, KuCoin also stopped its Peer-to-Peer (P2P) services in the country to “prioritize compliance efforts and establish a stronger, more secure environment for all users.”
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OKX Exchange to Exit Nigeria amid Regulatory Challenges