KuCoin, the cryptocurrency exchange, has announced that starting July 8, transaction fees will be subject to a 7.5% VAT for Nigerian users who have completed the KYC registration process. This new policy will make trading on KuCoin more expensive for Nigerians, despite the fact that the VAT will only apply to transaction fees and not the overall transaction volume.
The timing and regulatory implications of this move have raised concerns among stakeholders in Nigeria’s cryptocurrency ecosystem, especially considering the government’s ongoing prohibition of crypto websites, including KuCoin.
Lucky Uwakwe, the president of Nigeria’s Blockchain Industry Coordinating Committee (BICCoN), has highlighted potential challenges in implementing the new fee, including concerns about the government’s ability to oversee tax revenue transfers, verify user counts, and ensure accurate trade reporting. The Central Bank of Nigeria’s (CBN) restrictions on converting cryptocurrency to fiat currency further complicate matters, leaving uncertainty about how KuCoin plans to remit the collected VAT.
The decision to impose value-added tax on cryptocurrency transactions by KuCoin could indicate a shift in the official stance on the legitimacy of digital assets in Nigeria. Some analysts view the VAT as a positive step toward formally recognizing cryptocurrencies as legal tender in the country.
In other crypto news today, a Ripple advocate has predicted the end of the SEC case in July.