Exclusive: Two crypto startups submit licence application to Nigerian SEC

One month after Nigeria’s Central Bank lifted a ban on crypto, startups are now pushing for SEC licence

Two crypto startups have applied for licences from Nigeria’s Security Exchange Commission (SEC) after the central bank lifted its 2-year ban on crypto-related bank accounts, a highly-placed source at the exchange told TechCabal, signaling a push by crypto startups to take advantage of a recent u-turn by regulators.

Quidax and Luno, two popular crypto exchanges, reportedly began speaking to the SEC in October 2023, a source familiar with the talks told TechCabal.

Luno told TechCabal that it does not comment on discussions or potential discussions with regulatory authorities.

Quidax declined to comment for this story.

Another crypto company reportedly in talks with regulators is Yellow Card. “We have not made any public moves yet, but it is in the process,” said one person with knowledge of the company’s business.

Last week, Yellow Card announced

a partnership with American crypto exchange platform Coinbase that will allow Nigerians and people in 19 other African countries to use Coinbase’s wallet, purchase stablecoin (USDC), make remittances, save, and do everyday commerce on the platform.

Crypto startups are moving quickly

While the ban’s lifting eases business for crypto startups, experts doubt it will magically transform the market, which has found ways around the CBN ban to buy, sell, save, and trade crypto.

“Nigerians are very price-sensitive. Some of the platforms sell for about 20% more than relatively risky platforms,” a web3 PR consultant who asked not to be named told TechCabal.

“Beyond the exorbitant price, these crypto startups operate with a near-saviour complex and think that it is just enough for Nigerians to have access to the blockchain. If these platforms do not significantly become easier to use, people will continue using what they have been using to transact in crypto.”

Even though it came a year after the SEC published regulations to safeguard digital assets, the CBN may have removed the stigma associated with digital currencies, popularly linked to scams. A founder of a now-defunct crypto company told TechCabal, “It is probably the best thing, if not the only positive aspect, about the CBN’s guidelines.”

In December, the CBN lifted stringent regulations that had banned banks from transacting with crypto companies. In its place, the apex bank shared guidelines mandating banks to obtain the bank verification number (BVN) of all directors and owners of crypto businesses that use their services. The rules also say cryptocurrency companies must secure a license from the country’s capital markets regulator, the SEC. Earlier in May 2022, the SEC issued rules on offering and collecting digital assets.

The SEC did not directly respond to TechCabal’s inquiries about which startups had already applied for the licences.

*Editor’s note: This article has been updated to state that Luno declined to comment on this story