In a notable shift within the global cryptocurrency landscape, OKX, a prominent cryptocurrency exchange, has announced its withdrawal from Nigeria. This decision, communicated to its customers, comes amid a Regulatory Crackdown that has increasingly targeted digital currency operations within the West African nation.
In a statement issued by the company, OKX cited changes in local laws and regulations as the primary reason for its exit. “OKX is ceasing its operations in Nigeria due to the evolving regulatory environment,” the statement read.
It added, “We request you to please review your account and complete applicable steps by 12:00 am (PST) on August 16, 2024.”
OKX stated that users must close all open positions and orders in P2P, margin, perpetual, futures, and options markets, cancel any outstanding spot orders in USDT, DAI, and EURT, redeem assets from Grow products, including Earn, Loan, and Jumpstart, and transfer assets to a wallet of their choice.
The exit follows similar moves by other crypto exchanges, including Binance which is currently undergoing trial in the country.
In February 2021, CBN issued a circular to deposit Money banks (DMBs), non-bank financial institutions (NBFIs), and OFIs to close accounts of persons or entities involved in cryptocurrency transactions within their systems.
The regulator further warned local financial institutions against dealing in crypto assets or facilitating payments for crypto exchanges. CBN cited concerns over money laundering (ML), terrorism financing (TF), cybercrime, and the volatility of cryptocurrencies as reasons for the ban.
The CBN also prohibited regulated financial institutions from accepting or facilitating cryptocurrency payments, contradicting an earlier ban lifted in December 2023, a move that sent shockwaves through the burgeoning crypto community in the country.
The challenges faced by OKX in Nigeria are not unique. Globally, cryptocurrency exchanges have been navigating a complex web of regulations as governments seek to exert more control over digital currencies.
In the United States, the Securities and Exchange Commission (SEC) has been actively pursuing cases against unregistered crypto offerings, while in China, a sweeping ban on cryptocurrency transactions has forced many exchanges to shut down or relocate.
The European Parliament approved the Markets in Crypto-Assets Regulation (MiCA) in April 2023. This aims to regulate the issuance, distribution and trading of crypto-assets, as well as the provision of crypto-asset services. MiCA will enter into force in 2024.
The objective of MiCA is to provide a harmonised regulatory framework for crypto assets across the EU. MiCA is the first effort to regulate crypto-assets at European level. It provides a legal framework for crypto-assets that are not covered by existing EU financial law.
Despite this, Nigeria has remained one of the most active markets for cryptocurrency trading globally, driven by a combination of economic instability and a young, tech-savvy population.
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