- OKX has announced plans to exit Nigeria
- OKX suspended all Naira withdrawals in May 2024
- What are the major reasons OKX is exiting Nigeria?
One of the most popular cryptocurrency exchanges, OKX, has announced plans to exit the Nigerian market. The exchange announced this in an email to its customers on Wednesday, July 17, 2024.
The exchange said that starting from August 16, 2024, its customers in Nigeria would not be able to access its services or open new trading positions. However, the customers would still be able to withdraw their funds and close existing positions.
The exit email from OKX
The exchange urged Nigerian users to close all P2P, options, futures, and margin positions, as well as redeem all assets from Grow Products before August 16, 2024. All assets must be transferred from OKX to the user's chosen wallet, it advised.
Why is OKX exiting Nigeria?
Well, the big question is, why is OKX exiting a big crypto market like Nigeria? Nigeria is one of the world’s largest crypto markets. In fact, Nigeria's volume of crypto transactions grew 9% year-over-year to $56.7 billion between July 2022 and June 2023, according to New York-based blockchain research firm Chainalysis. Experts suggest that despite the regulatory issues in the country, crypto adoption is still growing, albeit rather slowly.
So, why would a crypto exchange exit such an important market? This article will attempt to explain the three most important reasons why OKX is exiting Nigeria.
Regulatory inconsistency
Regulatory issues is one of the main reasons why OKX is exiting Nigeria. The exchange made it clear in the exit email to its Nigerian users that “We are discontinuing OKX services in Nigeria after recent changes in local laws and regulations.”
Over the years, the Nigerian government has been clearly confused about what it wants the crypto market in the country to look like.
Authorities have consistently blamed its security challenges and terrorism in the north of the country on financing from cryptocurrencies.
Over the years, the country has banned and unbanned and cracked down on crypto traders in the country. As far back as February 2021, the country’s former president, Muhammadu Buhari, via the central bank, directed banks, non-bank financial institutions, and other financial institutions in the country to close accounts of individuals or organizations involved in cryptocurrency transactions within their systems.
The authorities would later start thinking of regulating and taxing the sector and on May 28, 2023, Muhammadu Buhari would sign into law the 2023 finance bill, which would impose a 10% gain tax on the sale of digital assets, including cryptocurrencies. Yet, there was no clear communication on the status of the ban.
Later, the authorities would start discussions on the possibilities of regulating the sector again, like the country’s Minister of Finance, Wale Edun, did when he inaugurated the SEC’s new board in the country’s capital, Abuja, on July 8, 2024.
The Binance treatment
Apart from the regulatory issues, OKX is well aware of the Binance treatment and is smart enough to run away from it. Here’s the back story: in February this year, Nigerian authorities accused Binance of being behind the terrible performance of its fiat currency, the naira. The naira has lost over 70% of its value against the US dollar in just over a year. As of June 28, 2024, the naira was the world’s worst-performing currency in the first half of 2024.
Credit: Bloomberg
The authorities said Binance provided the platform for currency speculators to ‘kill’ the currency while failing to acknowledge its terrible economic policies that have pushed headline inflation to 34.19% and food inflation to 40.87% in June 2024, according to its own statistics agency’s data.
So, it invited Binance for a meeting and the exchange sent its executives, Nadeem Anjarwalla and Tigran Gambaryan. The two were detained and are now facing money laundering and tax evasion charges in an Abuja court alongside the company. Anjarwalla escaped from detention, leaving Gambaryan behind. Gambaryan is detained in one of Nigeria’s prisons and is reported to be sick.
Binance has also ceased all naira services in Nigeria and asked users to withdraw their funds or convert them to dollar-denominated stablecoins.
Really, no reputable organization would want to have its executives in such a situation. So, the OKX exit could be linked to the Binance treatment.
Blocked access to crypto websites
Another important reason why OKX is exiting Nigeria is blocked access. The Nigerian government has since blocked access to nearly all of the centralized global crypto exchanges, including OKX, Binance, Coinbase, KuCoin, and many others. Users in Nigeria do not have access to the exchanges’ websites unless they use private virtual networks.
OKX had earlier suspended all Naira withdrawals in May 2024 after authorities accused Binance of being behind the Naira’s poor performance. At the time, OKX also cited regulatory concerns for the suspension.
After ‘failing’ with eNaira, Nigerian government wants to create its own blockchain called Nigerium
Meanwhile, TheRadar had earlier reported that Nigeria’s National Information Technology Development Agency (NITDA) has said it is ready to develop an indigenous blockchain called Nigerium. NITDA says it will use the technology to protect the country’s data and improve national security.
According to NITDA’s Director General, Kachifu Abdullahi, the agency has already set up a steering committee, ready to consult widely and develop a strategic and innovative developmental roadmap.
