Nigeria’s Crypto Industry Poised for Faster Regulatory Approvals Nigeria’s Securities and Exchange Commission (SEC) is gearing up to fast-track cryptocurrency licensing in 2025, this move could provide much-needed regulatory clarity for the country’s growing digital asset sector.
The commission, which launched the Accelerated Regulatory Incubation Programme (ARIP) in June 2024, has already granted provisional licenses to Quidax and Busha. Now, it aims to expand its oversight and at a faster pace, approve more applications. A source familiar with the SEC’s plans revealed that the regulator intends to “move quickly” in issuing provisional licenses this year. This shift signals a more structured approach to crypto regulation, replacing the uncertainty that plagued the industry.
The Need for Regulation
Nigeria’s crypto space is one of the most active in Africa, with individuals and businesses using digital assets to hedge against inflation and currency volatility. However, a lack of clear regulatory guidelines has raised concerns among investors and users. A report by Busha found that nearly half of the 1,500 Nigerian respondents—both crypto users and non-users—cited security risks as a major barrier to adoption. From costly errors on centralized exchanges to scams in peer-to-peer (P2P) transactions.
The rise of rug-pull scams, where creators manipulate token prices before cashing out and leaving investors with losses, has further shaken confidence. “Scammers thrive the most in the crypto space; if you find ways to take advantage of those who don’t know what they’re doing, that’s where you make the most money,” said Chibunna Kingsley, a Lagos-based crypto trader.
To combat these risks, crypto startups have invested in user education. However, industry experts argue that regulation is key to ensuring consumer protection. “If you’re a regulator, you should be worried about consumer protection,” noted Craig Stoehr, General Counsel at Yellow Card. “More has happened in the past nine months than in the two years before the SEC established ARIP. They’re on the right track.”
SEC’s Path to Regulation
The SEC’s journey toward crypto regulation began in September 2020 with its first framework for digital assets. By 2022, it had taken a more defined stance, focusing on how crypto should be classified under securities laws. This culminated in March 2024 when the commission mandated all virtual asset service providers (VASPs) to register.
The launch of ARIP in June 2024 marked a turning point, allowing crypto startups to obtain provisional licenses within a regulatory sandbox. The initiative also reflected Nigeria’s changing stance on digital assets; just three years ago, financial institutions were prohibited from servicing crypto companies. The ban was lifted in December 2023, enabling startups like Quidax, Busha, and Yellow Card to secure banking services, although some banks remain hesitant.
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