Nigeria Crypto Sandbox Hits First Wall: Quidax Shuts Down Peer-to-Peer Service
Quidax has shut down its peer-to-peer trading service just five months after its launch in Nigeria's crypto sandbox, citing regulatory concerns and user preferences. The SEC has raised alarms about the risks associated with P2P trading, leading to compliance challenges that ultimately forced Quidax to focus on more secure trading options. This move highlights the limitations of the regulatory sandbox in overseeing informal trading activities and suggests a cautious approach to crypto regulation in Nigeria.
TLDR: Quidax ends P2P trading, citing user preferences and regulatory caution within sandbox. SEC flags opaque P2P flows, off-platform settlements, and foreign platform dominance. Licensing delays and higher capital requirements raise compliance challenges for exchanges. Quidax delists 35 tokens to align platform with Nigerian regulatory expectations. Nigeria crypto sandbox has faced its first notable challenge as Quidax, a provisionally licensed digital asset exchange, announced the closure of its peer-to-peer (P2P) trading platform. The shutdown comes just five months after the feature launched under the Securities and Exchange Commission’s (SEC) Accelerated Regulatory Incubation Programme (ARIP). Quidax will continue instant swaps and order-book trading, but the P2P exit illustrates limits in the sandbox’s ability to oversee informal trading activity. P2P Trading Faces Regulatory and Operational Limits Quidax stated in an email to users, “We are retiring our P2P marketplace to focus on services that provide a more secure and efficient trading experience.” The platform added that ads, merchant chats, and escrow services will be disabled, while other trading products will continue. The P2P feature was initially designed to provide a controlled environment for users to trade directly. Merchants required full registration, Level-3 know-your-customer verification, two-factor authentication, and a minimum participation history. Approved traders were issued badges signaling verification and trust. Despite these safeguards, the SEC has expressed long-standing concerns over P2P markets. In 2024, the regulator noted that “opaque transaction flows, off-platform settlements, and foreign dominance make supervision challenging and increase risk for investors.” Quidax’s attempt to internalize trades within its platform responded to these issues, but operational limits have now become apparent. The P2P exit marks the first visible boundary of the sandbox, showing that activit...
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