Nigeria’s Securities and Exchange Commission (SEC) has admitted two more virtual asset service providers (VASPs) into its Accelerated Regulatory Incubation Programme (ARIP), the latest step in its efforts to bring the country’s growing crypto industry under formal regulatory oversight.
The latest entrants, GIGX Technologies and KuCoin Nigeria Limited, will both receive Approval-in-Principle (AIP), allowing them to operate within the SEC’s regulatory framework while working towards full registration. This means they have satisfied the regulator’s initial requirements and can begin operating under the programme’s supervision.
The announcement comes just a day after the SEC admitted seven other companies into the same programme, showing a faster push to bring digital asset businesses under formal regulatory oversight rather than leaving them in a legal grey area.
At first glance, it appears to be a routine regulatory announcement. But it raises several questions. What exactly is ARIP? Does Approval-in-Principle mean these companies are now licensed? And why is the SEC choosing this route instead of issuing licences outright?
Here’s what you need to know.
What are ARIP and AIP?
The Accelerated Regulatory Incubation Programme (ARIP) is the SEC’s way of bringing crypto companies into a regulated environment before granting them full licences.
Think of it as a probation period for digital asset businesses. Rather than granting a permanent licence as soon as a company applies, the regulator allows it to operate under supervision while assessing whether it can meet the standards around governance, operational resilience, customer protection, compliance, and risk management. ARIP is essentially the SEC’s testing ground for VASPs.
For the SEC, ARIP serves two purposes. It allows legitimate companies to enter the market while giving the regulator time to understand new business models in an industry that is still evolving.
Approval-in-Principle (AIP) is simply the first step in that process. Receiving AIP means a company’s application has met the SEC’s preliminary requirements.
Victoria Fakiya – Senior Writer
Techpoint Digest
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This does not mean the company has been fully licensed. Before reaching that stage, it must continue meeting the regulator’s expectations throughout the incubation programme.
For clarification, a Virtual Asset Service Provider (VASP) is any company that offers services involving digital assets such as cryptocurrencies.
Why isn’t the SEC issuing full licences immediately?
The SEC’s approach reflects the nature of the industry it is trying to regulate. Digital assets continue to evolve rapidly, with new products, business models, and technologies emerging every year. Rather than issuing permanent licences upfront, the regulator wants to see how companies perform under supervision before granting unrestricted approval.
The incubation period allows the SEC to monitor how firms handle customer funds, comply with anti-money laundering rules, manage operational risks, and protect consumers.
It also gives companies an opportunity to demonstrate their ability to operate responsibly within Nigeria’s regulatory framework. In effect, ARIP is designed to reduce regulatory uncertainty without slowing innovation.
Which companies have joined ARIP so far?
With the addition of GIGX Technologies and KuCoin Nigeria Limited, the SEC has recently admitted nine companies into the programme.
KuCoin Nigeria is the Nigerian entity of the global cryptocurrency exchange KuCoin, one of the world’s largest crypto trading platforms by trading volume. The exchange allows users to buy, sell and trade hundreds of digital assets.
The other new entrant GIGX Technologies, is a Nigerian fintech startup that participated in the Techstars Toronto accelerator. Originally conceived within the GIG Logistics ecosystem, the company is building a digital wallet that combines payments, savings, and decentralised finance (DeFi) services.
The earlier admitted crypto companies are Bitbarter, Luno Nigeria, GetEquity, Koinkoin, Wrapped CBDC, Trovotech, and Blockvault Custodian.
The growing list suggests that the SEC is increasing efforts to bring more digital asset businesses into its regulatory framework as Nigeria’s crypto industry continues to mature.
What financial and registration requirements must companies meet?
The SEC’s Accelerated Regulatory Incubation Programme (ARIP) isn’t open to just any crypto company. Before a firm can receive Approval-in-Principle (AIP), it must demonstrate that it has both the financial capacity and corporate structure to operate under regulatory oversight.
On the financial side, applicants must demonstrate the required shareholders’ funds for the service category they intend to offer and maintain a valid Fidelity Bond covering at least 25% of those funds.
Companies must be incorporated in Nigeria, maintain a physical office in the country, and have a Chief Executive Officer or Managing Director who resides in Nigeria. They must also either be applying for SEC registration as a virtual asset service provider or already have a pending application before the Commission.
As part of the application process, firms are required to submit documentation including their Corporate Affairs Commission (CAC) incorporation records, audited financial statements (or a statement of affairs for newly established companies), tax identification and clearance documents, evidence of registration with the Nigerian Financial Intelligence Unit (NFIU), and details of at least four principal officers, including the Managing Director and Compliance Officer. Applicants must also appoint a registered solicitor or adviser to file on their behalf and, where applicable, provide a “No Objection” letter from any regulator under which they are already licensed.
Only after satisfying these requirements can the SEC issue an Approval-in-Principle, allowing the company to operate within the ARIP framework while working towards full registration.
Does this mean crypto is now fully legal in Nigeria?
Not exactly. The SEC’s announcement does not mean every cryptocurrency platform operating in Nigeria is automatically authorised.
Instead, it means that companies seeking to offer regulated digital asset services must go through the SEC’s approval process. Businesses admitted into ARIP are recognised by the regulator but are still working towards full registration.
For users, the distinction matters. As more companies seek regulatory approval, it becomes increasingly important to verify whether a platform has received the SEC’s recognition before using its services.
Why should Nigerians care?
For everyday users, stronger regulation could increase confidence in the digital asset market.
A clearer regulatory framework can improve accountability, strengthen consumer protection, and make it more difficult for fraudulent operators to present themselves as legitimate businesses. It also gives investors and businesses greater confidence about which companies are operating within recognised regulatory standards.
While regulation cannot eliminate all investment risks, it can create clearer rules for companies and provide users with greater transparency about which businesses are operating within Nigeria’s legal framework.
