Nigeria’s Securities and Exchange Commission (SEC) has granted provisional licences to two digital asset exchanges, Quidax and Busha, one week after the regulator hinted that it would issue its set of first crypto licences.
“The referenced Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are meant to ensure that appropriate protection and transparency is in place in respect of each product or service,” the SEC said in a statement on Thursday.
The two companies will operate under the Accelerated Regulatory Incubation Program (ARIP) introduced in July 2024. ARIP was created to onboard crypto exchanges which had commenced operations before the SEC released rules on virtual asset service providers in May 2022.
“The license admits the startups into the SEC’s accelerated regulatory incubator which allows us to study them and fashion rules [to guide their operations],” SEC Director General Emomotimi Agama said on a call with TechCabal.
“Millions of Nigerian crypto enthusiasts and users deserve safe and moderated local venues for managing and trading crypto-assets, and this is an overdue step to sanitise the space for the benefit of the economy, in line with global expectations,” Busha CEO Michael Adeyeri wrote on X.
Quidax also confirmed it has received the provisional licence.
This ends months of uncertainty about the regulator’s stance on issuing crypto licences. Last week, several publications claimed that the SEC approved a provisional licence to a major crypto platform—a claim the regulator denied. In January 2024, TechCabal reported that at least two crypto exchanges were in talks with the SEC over a crypto licence after the Central Bank lifted a two-year ban on crypto-related banking transactions.
It will also signal a major policy turnaround for crypto exchanges that have faced increased scrutiny from Nigerian regulators since February 2024. The SEC has talked up banning P2P trading which Nigerian authorities blame for the volatility in the FX market. In May 2024, the SEC DG met with crypto industry players and reiterated the need for crypto exchanges to delist naira from P2P trading.
