• The exit of the OKX Crypto Platform from Nigeria due to legal problems highlights the difficulties of crypto exchanges in that country.

• The future of crypto trading in Nigeria is uncertain due to stringent regulations.

• Despite regulations, peer-to-peer crypto transactions in Nigeria continue to thrive.

Africa’s crypto ecosystems have sent shockwaves throughout the industry amid the crypto bull run. With each passing day, more and more are drawn into the lucrative world of crypto trading, further propelling its adoption throughout the continent.

Furthermore, African-based web3 startups have sprung up, ushering in a new age of finance and technology and embracing the change Web3 has aimed for since the launch of the first digital asset.

Unfortunately, this progress has met numerous hurdles, affecting even the largest crypto regions in Africa. For instance, the Central Bank of Nigeria recently began a digital asset crackdown to salvage its declining fiat currency.

Despite crypto trading in Nigeria being among the top 5 worldwide according to  Chainalysis’ 2023 Global Crypto Adoption Index, the region’s trading environment has grown stale and full of regulatory uncertainty.

In recent developments, the OKX Crypto platform has officially announced it will no longer be its services as of August 16, 2024.

Nigerian crypto regulations have proven cumbersome to its community as its government and central bank are still weary of digital assets’ sheer growth and adoption rate.

Crypto trading in Nigeria readies for trying times ahead.

Crypto trading in Nigeria is one of the many highlights of Africa’s assent towards a blockchain future. The nation has been featured numerous times among the top crypto trading regions worldwide.

Within Africa alone, Nigeria was among the first regions to showcase a positive incline in peer-to-peer crypto transactions. Its unstable fiat currency forced many citizens to look for alternative means of income, and the crypto industry offered the perfect solutions.

According to a report from Reuters, Nigeria’s volume of crypto transactions grew 9% year-over-year to $56.7 billion between July 2022 and June 2023. This figure represents the most recent climax of the region, showcasing how crypto trading in Nigeria has become a growing solution to improve its citizen’s livelihood.

Also, Read: Nigeria’s Anti-Corruption Drive: Blockchain, AI, and Financial Transparency

Unfortunately, this solution worked too well, eventually posing a threat to the Central Bank of Nigeria and its fiat currency.

From the get-go, its government rejected the notion of cryptocurrency and banned its use within banks. This, however, only seemed to further the region’s “crypto flame” as it only placed a dent within its trajectory. As the years progressed, its government introduced the naira, Africa’s first CBDC, hoping to introduce a digital asset as an alternative.

Unfortunately, CBDCs are fundamentally different from cryptocurrencies, only increasing their accessibility but doing little to their value. As a result, the Enaira effectively failed to replace its growing crypto adoption.

Soon, the web3 organization emerged within Nigeria, taking advantage of its growing market. Despite Nigerian crypto regulations keeping a tight leash on banks, it did little to affect the progress of fintech or web3 organizations. Peer-to-peer crypto transactions only soared.

This eventually forced the hand of the Central Bank of Nigeria, which identified crypto trading as a primary cause of its fiat decline.

This led to crypto-related incidents involving significant issues related to Binance, several Nigerian Fintech platforms, and individual crypto traders. The bank sued Binance for alleged tax evasion, forcing the billion-dollar company to restrict and limit its availability within the regions.

This turn forced Binance to consider leaving Nigeria, igniting a trend that could end the region’s crypto dominance.

OKX Crypto Platform Follows suit

With Nigeria’s crypto regulations increasingly becoming unfavourable, many fintech organizations within the area have suffered heavy losses. The OKX Crypto Platform, a renowned exchange within Africa, was among those who could not adapt to the changes.

In May 2024, the OKX crypto platform announced it would cease its Naira withdrawals due to regulatory concerns. This came shortly after the Central Bank of Nigeria accused Binance of manipulating the Naira currency.

With Naira withdrawals shut down, many speculated the steady decline of the OKX Crypto platform, and such fears finally materialized. The crypto trading platform officially announced that starting August 16, they would no longer open new trading positions or access services for Nigeria.

Also, Read: Nigerian Senate Pushes for Comprehensive Crypto Regulation to Stabilize Naira.

The exchange said, “We are discontinuing OKX services in Nigeria after recent changes in local laws and regulations. This is based on our ongoing assessment of policies in each market we serve.“

OKX Crypto Platform urges all its users to close all open positions and orders in Peer to peer crypto transactions, 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.

They added, “We request you to please review your account and complete applicable steps by midnight (PST) on August 16, 2024.“

With strict Nigerian crypto regulations in place, the region’s crypto economy has declined, forcing other exchanges to tread carefully. The CBN has prohibited regulated financial institutions from accepting or facilitating crypto payments, eradicating an earlier ban lifted in December 2023.

Uncertain regulations have been the Achilles heel for the crypto industry in general. Establishing unclear or restrictive crypto regulations has slowed or eliminated a region’s adoption rate. A prime example is the US crypto environment. The SEC crackdown on crypto in the US has painted a negative picture for the area. Many international and local exchanges have shut their doors to the US, dealing a massive blow to its crypto adoption rate.

If Nigerian crypto regulations continue to hinder the progress of exchanges such as the OKX Crypto platform, it will inevitably lead down a similar path as the US.