In a landmark move for Nigeria’s burgeoning cryptocurrency sector, the Securities and Exchange Commission (SEC) has issued the first provisional operating license to Quidax, an African-founded crypto exchange. 

This pivotal development signals the beginning of formal recognition and much-needed regulatory oversight for the country’s digital asset industry.

According to a release shared with Cointelegraph, the SEC’s license permits Quidax to operate as a registered crypto exchange in Nigeria, a significant step toward legitimizing the crypto market. 

Quidax announced this milestone in an email, equating the SEC’s approval to a “shot of adrenaline” for the Nigerian crypto community, encouraging further innovation and expansion.

Regulatory milestone

Buchi Okoro, Co-founder and CEO of Quidax, praised the SEC, particularly under the new leadership of Dr. Emomotimi Agama, for their decisive action to bring order, confidence, and investor protection to the crypto industry. 

This regulatory approval now enables Quidax to collaborate with banks and other financial institutions, pending the Central Bank of Nigeria’s approval. The SEC’s licensing follows a comprehensive amendment to its rules on June 21, which covered digital asset issuance, offering platforms, exchange, and custody. 

A notable part of this regulatory overhaul is the introduction of the Accelerated Regulatory Incubation Programme (ARIP), designed to help virtual assets service providers (VASPs) align with new regulatory requirements.

Despite these advancements, there was initial concern that the stringent licensing requirements might significantly reduce the number of local crypto exchanges. 

The Nigerian SEC mandates a minimum upfront capital requirement of 500 million naira ($556,620) and a current Fidelity Insurance Bond covering at least 25% of the stipulated minimum paid-up capital for both Digital Assets Exchanges and Digital Assets Offering Platforms (DAOs).

Nigeria’s crypto landscape

Nigeria, Africa’s largest economy, has consistently ranked high in global cryptocurrency adoption. According to a recent survey spanning 15 countries, Nigeria boasts the world’s most cryptocurrency-aware population. 

Chainalysis’ “2023 Cryptocurrency Geography Report” placed Nigeria second in crypto adoption among 154 countries, underscoring its critical role in the global digital asset ecosystem.

However, despite the high adoption rate, the anticipated influx of foreign crypto investment has not materialized as expected. The new regulatory framework and Quidax’s licensing could potentially alter this trajectory by providing a more stable and secure environment for both local and international investors.

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