Nigeria Issues First Crypto Exchange License

The Nigerian Securities and Exchange Commission (SEC) has granted Quidax, a crypto exchange based in Africa, its first provisional operating license.

This marks a significant step toward formal recognition and regulatory oversight of the digital asset industry in Nigeria.

According to a press release shared with Cointelegraph, the SEC’s license allows Quidax to function as a registered crypto exchange in the country.

Quidax described the SEC’s approval as a “shot of adrenaline” for the Nigerian crypto community, fostering further innovation and growth.

Buchi Okoro, Quidax’s co-founder and CEO, commended the SEC, especially under the new leadership of Emomotimi Agama, for its decisive efforts to bring order, confidence, and investor protection to Nigeria’s crypto sector.

With regulatory approval in hand, Quidax can now collaborate with banks and other financial institutions, pending further approval from the Central Bank of Nigeria.

This licensing comes after the SEC’s comprehensive rule amendment on June 21, which addressed digital asset issuance, offering platforms, exchange, and custody.

A key aspect of this regulatory update is the introduction of the Accelerated Regulatory Incubation Programme, designed to help virtual asset service providers comply with the new regulations.

Despite these advancements, there were initial concerns that the stringent licensing requirements could significantly reduce the number of local crypto exchanges.

The Nigerian SEC requires a minimum upfront capital of 500 million naira ($556,620) and a current Fidelity Insurance Bond covering at least 25% of the required minimum paid-up capital for both digital asset exchanges and digital asset offering platforms.

Nigeria, Africa’s largest economy, has consistently been a global leader in cryptocurrency adoption. A recent survey across 15 countries identified Nigeria as having the world’s most cryptocurrency-aware population.

Chainalysis’ “2023 Cryptocurrency Geography Report” ranked Nigeria second in crypto adoption out of 154 countries, highlighting its vital role in the global digital asset ecosystem.

However, despite this high adoption rate, the expected surge of foreign crypto investment has not yet occurred.

The new regulatory framework and Quidax’s licensing could change this by providing a more stable and secure environment for both local and international investors.

Sources:

https://cointelegraph.com/news/quidax-first-nigerian-sec-licensed-crypto-exchange

https://go.chainalysis.com/rs/503-FAP-074/images/2020-Geography-of-Crypto.pdf

https://www.bloomberg.com/news/articles/2024-08-20/nigeria-s-sec-to-licence-crypto-exchanges-as-adoption-surges

https://decrypt.co/244705/nigerian-sec-quidax-first-crypto-exchange-license