The Securities and Exchange Commission (SEC) has explained reasons for the delay in issuing more provisional licences for crypto exchanges after licensing Quidax and Busha in August last year, saying it has to carry out more due diligence.
The Director General of the SEC, Emomotimi Agama, stated this while speaking during a virtual engagement with fintech stakeholders on the Investment and Securities Act (ISA 2025) on Monday.
He acknowledged that the Commission had received several applications before and after announcing the first provisional licenses last year, but noted that a lot of issues had come up from the first set of licences that require a higher level of due diligence.
“I must apologise to people or individuals, and companies that have applied ever since before the issuance of the provisional licenses and up to this point. That work has been happening on the ground.
“Out of those first provisional licenses, we have observed some very important issues which we need to take care of.
“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 SEC DG explained.
Agama also noted that the process is taking a longer time because other regulatory agencies have to make inputs.
He said the SEC did not intend to keep the applicants waiting, but it has to do everything necessary “to make sure that every gap that we have seen is covered.”
The SEC DG added that with the signing of the Investment and Securities Act (ISA 2025), there was also the need to adjust every aspect of the licensing regulation to completely align with the Act and to provide clarity to the entire work that has been done.
“This is in collaboration with other sister agencies for which 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.
The SEC in August last year announced that it had granted an Approval-in-Principle to two crypto exchanges, Quidax and Busha, giving them the status of legally recognised crypto trading platforms in the country.
The two exchanges were approved under the Accelerated Regulatory Incubation Program (ARIP) program of the Commission.
In addition to that, the Commission also admitted four companies to test their models and technology under its Regulatory Incubation (RI) Program.
The four firms are digital assets offering platforms, which include Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExhange.NG Ltd.
At the time, the SEC noted that the approved firms were not the only entities that had applied to ARIP and the RI Program.
It added that other applications received were being assessed and would be granted Approval-in-Principle on a case-by-case basis as they meet all its requirements.
