The Nigerian Securities and Exchange Commission (SEC) has granted Quidax, an Africa-based cryptocurrency exchange, its first provisional operating license.
Quidax’s license allows it to operate as a registered crypto exchange in Nigeria. The company described the SEC’s approval as a “shot of adrenaline” for the Nigerian crypto community, “fostering further innovation and expansion”.
Quidax’s co-founder and CEO, Buchi Okoro, commended the SEC and its new leadership under Emomotimi Agama for bringing “order, confidence, and investor protection” to the industry. The regulatory approval will also enable Quidax to collaborate with banks and other financial institutions, pending further approval from the Central Bank of Nigeria.
The SEC’s licensing move follows amendments to its rules on June 21, addressing digital asset issuance, offering platforms, exchange, and custody. A key aspect of these changes includes the Accelerated Regulatory Incubation Programme to help virtual assets service providers comply with new regulations.
There were initial concerns that the stringent requirements, such as a minimum upfront capital of 500 million naira ($556,620) and a Fidelity Insurance Bond covering at least 25% of this capital, might limit the number of local crypto exchanges. However, the recent approval of Quidax suggests a move towards a more regulated and stable environment.
Nigeria, Africa’s largest economy, remains a leader in global cryptocurrency adoption. A recent survey ranks Nigeria as having the world’s most cryptocurrency-aware population, and the “2023 Cryptocurrency Geography Report” by Chainalysis placed Nigeria second among 154 countries in terms of crypto adoption.
Despite the country’s high adoption rate, the expected surge of foreign crypto investment has been slow to materialize. The new regulatory framework, coupled with Quidax’s licensing, could change this by creating a more secure environment for local and international investors.
Intermittingly, Binance officials claimed that Nigerian authorities requested a bribe of $150 million in crypto funds during an earlier visit in January. Nigerian politicians dismissed this allegation as “an attempt to distract and draw attention away from the serious allegations of criminality against it” and demanded an apology. They also accused the company of using “sophisticated criminality” to aid its detained executives’ escape.
Binance has a massive user base in Nigeria, one of Africa’s largest economies. The platform is particularly popular among young people in urban areas who use it to bypass conventional market platforms, especially as the naira’s value frequently fluctuates against the dollar. Nigerian officials argue that trading on Binance has contributed to the naira’s instability.
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