Nigeria’s crypto sandbox setback as Quidax stops P2P trading
Quidax, a Nigerian crypto exchange that held a provisional licence under the SEC’s Accelerated Regulatory Incubation Program (ARIP), has paused its peer-to-peer (P2P) marketplace five months after launch, citing user preference. The shutdown removes P2P ads, merchant chats and related features, while remaining services — instant swaps and order-book trading — continue to operate. The move comes amid tighter oversight from the Securities and Exchange Commission, which in 2024 and 2025 raised concerns about opaque off-platform settlements, exchange-rate manipulation and foreign P2P operators. Under new rules classifying digital assets as securities, regulators raised minimum capital requirements (N2 billion for platforms; N500 million for Digital Assets Intermediaries) and required tax ID collection for users. Quidax had been implementing stricter merchant vetting (Level 3 KYC, 2FA, minimum activity, badges) to keep P2P within a regulated framework, but discontinuation suggests regulators may favour stricter controls or further restrictions. Licensing progress for exchanges such as Quidax and Busha has slowed as the SEC pauses approvals to reassess readiness. Traders should monitor regulatory updates in Nigeria for potential liquidity shifts in local crypto markets and impacts on P2P-dependent price discovery.
Bearish
Quidax’s halt of P2P services signals reduced on‑ramps and liquidity for Nigeria’s local crypto market, which is likely bearish in the near term. P2P trading in Nigeria has been a primary liquidity and price-discovery channel; removing a marketplace — even if centralized spot and swap services remain — can compress local liquidity, widen spreads, and increase slippage for traders who relied on P2P bank-settled flows. The action also reflects intensified regulatory scrutiny (higher capital requirements, classification of digital assets as securities, tax-ID mandates) and slower licensing, which typically raises operational costs and market uncertainty. Historical parallels: regulatory clampdowns or market exits (e.g., limits on local fiat ramps in other jurisdictions) have often produced short-term price pressure and reduced volumes for locally traded pairs. Over the medium to long term, outcomes depend on whether stricter regulation restores institutional confidence and on-ramps are rebuilt under compliant frameworks; that could stabilise markets and attract more capital. For now, expect reduced P2P liquidity, tighter order-book depth on local pairs, possible price dislocations for NGN-anchored markets, and elevated volatility until regulatory direction and licensing progress clear up.