OKX to Stop Serving Nigerian Users Due to Regulatory Challenges

• Regulatory compliance forces OKX to cease Nigerian operations, impacting user access and services.
• Nigeria’s stringent VASP regulations require exchanges to meet high financial and operational standards.
• Binance and KuCoin also face regulatory challenges in Nigeria, reflecting industry pressures.

Nigerian customers of the cryptocurrency exchange OKX will no longer be supported. The judgment, which follows earlier restrictions on Naira withdrawals in May, takes effect on August 30. The exit was confirmed by an OKX representative, who emphasized the need to adhere to local regulations.

“We had to let our Nigerian customers know that starting August 30, we won’t be able to keep offering our services there,” explained a spokeswoman. She emphasized that Nigerian users should withdraw or transfer their money before then to avoid any issues, as outlined in OKX’s terms of service.

Regulatory Compliance and User Safety

OKX has assured users that their funds remain secure despite the service suspension. The company urges locals to act promptly to avoid potential issues, which highlights OKX’s commitment to strict regulatory adherence.

Financial Virtual Asset Service Providers (VASPs) must abide by strict restrictions within Nigeria’s framework. These include registering with the Corporate Affairs Commission (CAC), acquiring an SEC license, and maintaining $553,00 as the minimum paid-up capital.

Exchanges are also required to set up Know Your Customer (KYC) practices, report questionable transactions, and get Bank Verification Numbers (BVNs) in order to confirm the identity of their consumers.

In addition, VASPs need to guarantee user data protection and have a physical presence in Nigeria. Any data breaches ought to be reported right away. Serious consequences, such as large fines, registration revocation, or an operational prohibition, may follow noncompliance.

Industry-Wide Impact and Responses

OKX’s decision comes after Binance made a comparable move in March by discontinuing support for the Nigerian Naira. In Nigeria, Binance encountered legal issues, including as accusations of tax evasion and money laundering. These issues escalated with the detention of Binance executives, though the tax charges were later dropped.

In February, Tigran Gambaryan, Binance’s head of financial crime compliance, and regional executive Nadeem Anjarwalla were detained upon arrival in Nigeria. While Anjarwalla escaped custody, Gambaryan remained detained and is reportedly in poor health due to malaria and pneumonia.

Moreover, KuCoin stopped offering its peer-to-peer (P2P) services in Nigeria in May. Prioritizing compliance and creating a more secure user environment were the two main goals of the exchange. This pattern highlights the mounting regulatory pressure on Nigerian bitcoin exchanges.