Nigeria’s Securities and Exchange Commission (SEC) has postponed issuing new provisional licenses to crypto startups under its Accelerated Regulatory Incubation Programme (ARIP), citing the need for an additional layer of due diligence, according to its director general, Emomotimi Agama.
This delay represents a setback for digital asset startups that were hoping for faster approval after the SEC’s December 2024 pledge to speed up the licensing process. TechCabal reported this development.
Speaking at a virtual stakeholder engagement hosted by the Fintech Association of Nigeria (FintechNGR) on April 14, Agama acknowledged the slow pace and apologised to applicants.
“Work has been going on underground. From the first batch of provisional licenses [issued in August 2024], we have observed important issues we need to take care of,”
Agama said.
“Additional level of due diligence, what I call Level 3 due diligence, needs to happen before we can come out with the next set of provisional licenses.”
However, Agama did not provide a new timeline for when licenses would resume.
He highlighted that there are still gaps and challenges in the startup due diligence process. Regulatory oversight of Nigeria’s crypto sector is not solely under the SEC’s control.
The commission is collaborating with the Economic and Financial Crimes Commission (EFCC), the Nigerian Financial Intelligence Unit (NFIU), and the Office of the National Security Adviser (ONSA) – agencies that have independent processes which the SEC “does not control,” according to Agama.
Since issuing provisional licences to exchanges Quidax and Busha in August 2024, the SEC has not approved any new applicants.
Numerous startups that submitted applications under ARIP in June 2024 are still working with the regulator to better understand compliance requirements and develop consumer protection safeguards in a sector often likened to the financial “Wild West.”
The need for multi-agency coordination in crypto regulation has significantly slowed the issuance of provisional licenses, leaving many startups, particularly those awaiting the reopening of ARIP applications, in regulatory limbo.
These startups are expected to register with the SEC to legally operate within Nigeria’s digital asset space, yet the pathway remains unclear.
While the need for tighter scrutiny to curb money laundering and terrorist financing is justified, there is also an urgency for the regulator to move faster.
Agama noted that collaboration is a value the SEC wants to adopt more fully to provide a solid crypto regulatory framework.
For now, however, crypto startups may face a prolonged wait before receiving the regulatory clarity they seek.
With the recent passage of the Investment and Securities Act 2025, signed into law by President Bola Tinubu, formally recognising cryptocurrencies as securities under the SEC’s jurisdiction, the foundation for a more structured crypto ecosystem may finally be taking shape.
Featured image credit: edited from freepik
