The Nigerian crypto community faces uncertainty after KuCoin, a prominent global cryptocurrency exchange, announced a new tax policy. Starting July 8, the cryptocurrency exchange will impose a 7.5% value-added tax (VAT) on transaction fees for users with Know Your Customer (KYC) information registered in Nigeria.

KuCoin Introduces VAT for Nigerian Users

In a post on X, KuCoin informed its Nigerian users that the new tax only applies to the fee charged per transaction and not the overall transaction amount. For instance, buying 1,000 USDT worth of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term incurs a fee of 1 USDT (0.1%), and the VAT on this fee would be 0.075 USDT, making the net transaction amount 998.925 USDT.

✅KuCoin introduces 7.5% VAT on trading fees for Nigeria Users

We are writing to inform you of an important regulatory update that impacts our users from Nigeria.

Starting from July 8th, 2024, we will begin collecting a Value-Added Tax (“VAT”) at a rate of 7.5% on… pic.twitter.com/Y6elL3RjFi

— KuCoin Africa (@KuCoinAfrica) July 3, 2024

The source of approval for this VAT remains ambiguous, Cointelegraph reported. It is unclear whether the Nigerian government or an agency like the Federal Inland Revenue Service authorized this tax. The lack of clarity has left many in the Nigerian crypto community questioning the legitimacy and implementation of the VAT.

Besides that, there is uncertainty about the approving authority, with concerns arising over KuCoin's ability to remit the VAT, given the Central Bank of Nigeria's restrictions on converting cryptocurrency to fiat currency. There is also uncertainty regarding whether the VAT applies solely to peer-to-peer trades involving the naira or all crypto transactions conducted on the platform.

Seeking Clarification

As the July 8 implementation deadline for the new changes approaches, KuCoin and Nigerian authorities are expected to provide an explanation to avoid further confusion and potential disruptions in the market.

Early this year, KuCoin announced that it had joined its competitors, reporting an increase in its customer base to over 30 million and doubling its spot market volumes. The crypto exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term reported that it had experienced a 16% increase in its number of users, reaching nearly 31 million users globally. In the same period, the company posted a 106% boost in spot trading volume, highlighting strong user engagement.