Crypto exchange, KuCoin, says it will start collecting a 7.5% value-added tax on trading fees from its Nigerian users starting from July 8 2024.
“We are writing to inform you of an important regulatory update that impacts our users from the Republic of Nigeria,” KuCoin said.
“Starting from July 8 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5 per cent on transaction fees in each trade for users whose KYC information is registered in Nigeria.”
According to KuCoin, the 7.5% fee will apply to each trade’s transaction fees, not the transaction amount. It added that the fee covers all transaction types that Nigerian users can perform on its platform.
The company attributed its new decision to ‘an important regulatory update’ even though other crypto trading platforms in the country, like ByBit and Binance, are yet to reveal such tax measures for their users.
The move comes just over a week after the Nigerian Securities and Exchange Commission (SEC) issued a notice asking local crypto firms to apply for registration under its amended rules in less than 30 days.
🇳🇬REGULATION | Nigeria SEC Issues a Notice for Onboarding VASPs in 30 Days Due to ‘Current Realities’
Following the 30-day-period, the Commission indicated that it would commence enforcement action against any operating VASP that fails to comply with the directives.… pic.twitter.com/ThvMC4MwFQ
— BitKE (@BitcoinKE) June 22, 2024
KuCoin was one of the exchanges that suspended some of its services, including P2P, as the federal government clamped down on crypto firms earlier this year.
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“There was a meeting of crypto founders on Tuesday [February 27 2024] morning, and a number of them agreed to suspend the trades on their platform,” a person at that meeting told a local… pic.twitter.com/iiYBuYrpOu
— BitKE (@BitcoinKE) February 29, 2024
“Starting from 2024-05-15 08:00 (UTC), we will temporarily suspend all P2P Nigerian Naira (NGN) services and Fast Buy service via Naira cards. During this temporary pause, we will be focusing on ensuring compliance and creating a more robust and secure environment for all our users,” KuCoin said at the time.
Exchanges operating in the country have been under scrutiny as authorities believe that crypto platforms facilitate speculation and potential manipulation of exchange rates. Coinbase, Quidax, and Binance were also affected.
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