05-01-2025 
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When the Nigerian securities watchdog issued its first two virtual asset service provider (VASP) licenses in 2024, it seemed like the beginning of a new era. However, it has yet to issue more licenses, and it now says it’s in no rush to grant new approvals.
Speaking at a recent industry event, the Director General of the Securities and Exchange Commission (SEC), Emomotimi Agama, acknowledged that the agency has received dozens of applications from VASPs. However, after issuing the first two, the SEC “observed some very important issues which we need to take care of,” he stated.
“We have observed that some additional level of due diligence, what I call a level three due diligence, needs to happen before we can come out with the next provisional licenses. It may appear to have taken too long, more than necessary,” the director general said.
The SEC issued provisional licenses to Quidax and Busha last year, its first under a new regulatory framework. It followed a revamped crackdown on offshore exchanges, which had dominated the market for years. The crackdown culminated in the shutdown of every other major exchange’s Nigerian operations, from KuCoin to Coinbase (NASDAQ: COIN).
It didn’t end there: the SEC and other agencies pursued Binance for its role in the destabilization of the country’s forex sector, arrested and detained its executives, and filed an $81.5 billion lawsuit against the exchange.
Beyond the enhanced due diligence, the SEC head blamed the delays on slow inter-agency coordination.“[Licensing] is in collaboration with other sister agencies [and] we have very little control around their processes, and so we wait and hope to hear from everyone within the shortest time frame in order to be more comfortable with the licenses or provisional licenses that will be issued out,” he stated, as reported by local outlet Nairametrics.
The SEC’s cautious licensing approach has not spared it from taking the bulk of the blame for the collapse of CBEX, a digital asset multi-level marketing scheme that targeted Nigerian and Kenyan investors. CBEX went down with over $800 million in user funds, leaving a trail of distraught investors who believe the SEC should have done more to protect them.
However, Agama dismissed the blame, stating that CBEX was an unregistered company and that it’s up to investors to conduct due diligence before investing with any firm.
“Without registration, the possibility of regulation becomes difficult,” he said.
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