Starting from July 8th, 2024, KuCoin users in Nigeria will be subject to a 7.5% Value-Added Tax (VAT) on transaction fees, which will be calculated and deducted from the payments of each trade. The memo was sent from KuCoin informing users in Nigeria about the new regulatory update.

Nigerian crypto traders were displeased with this latest update, expressing their frustration with the Nigerian government. Despite publicly banning crypto transactions and implementing strict rules against violators, the government now seeks to impose taxes on crypto transactions. Many traders suggested that a clear regulatory framework should be established if the government is serious about crypto taxation. Others called for a boycott of KuCoin, criticizing the platform for quickly complying with the government's demands.

Earlier in the year KuCoin suspended its Peer-to-Peer (P2P) trading services in Nigeria following a directive from the Nigerian federal government. This directive required cryptocurrency platforms to delist the Naira from P2P trading to stabilize the currency’s value. In response, KuCoin temporarily suspended all P2P Nigerian Naira services.

This series of regulatory changes reflects the ongoing challenges in Nigeria, where the government struggles with managing the growing popularity of cryptocurrencies. For KuCoin, navigating these regulatory actions is challenging as they strive to comply with local laws while maintaining operations in key markets.

The imposition of VAT on crypto transactions could be seen as an attempt by the Nigerian government to find a middle ground, regulating the space while benefiting from its growth. However, without a clear and supportive regulatory framework, these measures may inadvertently drive more traders towards decentralized exchanges and other platforms that are harder to regulate.