Quidax receives SEC license, enhancing Nigeria’s crypto sector

The Nigerian Securities and Exchange Commission (SEC) has granted Quidax, an Africa-based cryptocurrency exchange, its first provisional operating license. This approval allows Quidax to operate as a registered crypto exchange within Nigeria.

Quidax hailed the SEC’s decision as a significant boost for the Nigerian crypto community, describing it as a “shot of adrenaline” that will encourage further innovation and expansion in the sector. The company’s co-founder and CEO, Buchi Okoro, praised the SEC’s new leadership under Emomotimi Agama for enhancing “order, confidence, and investor protection” in the industry.

With the new license, Quidax is poised to collaborate with banks and other financial institutions, pending additional approval from the Central Bank of Nigeria. The SEC’s licensing decision follows amendments made to its regulations on June 21, which addressed digital asset issuance, offering platforms, exchanges, and custody. The updated framework includes the Accelerated Regulatory Incubation Programme, designed to help virtual asset service providers comply with new regulations.

Initially, there were concerns that the SEC’s 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, Quidax’s approval suggests a shift towards a more regulated and stable environment for the industry.

Nigeria, recognized as Africa’s largest economy, continues to lead in global cryptocurrency adoption. Recent surveys highlight Nigeria’s high cryptocurrency awareness, with the “2023 Cryptocurrency Geography Report” by Chainalysis ranking it second among 154 countries for crypto adoption.

Despite this high adoption rate, the anticipated influx of foreign crypto investment has been slow. The new regulatory framework and Quidax’s licensing could enhance the security of the market and attract both local and international investors.

In related news, Binance, a major player in Nigeria’s crypto market, faced allegations from its officials that Nigerian authorities sought a bribe of $150 million in crypto funds during a visit in January. Nigerian politicians have dismissed these claims as distractions and demanded an apology.

They also accused Binance of using “sophisticated criminality” to aid its detained executives’ escape. Binance remains popular among Nigeria’s youth, especially in urban areas, due to the naira’s instability against the dollar. Nigerian officials argue that trading on Binance has exacerbated the naira’s volatility.