Nigeria Crypto Sandbox Hits First Wall: Quidax Shuts Down Peer-to-Peer Service

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 activities not closely aligned with traditional capital-market structures, such as order-book trading or custodial swaps, remain easier to supervise. Quidax’s decision highlights the balance between innovation and regulatory visibility.

Licensing Delays and Strategic Platform Adjustments

Quidax’s timing coincides with delays in ARIP licensing. Startups, including Quidax and Busha, were expected to transition to full licenses by August 2025.

A SEC spokesperson said, “We are reassessing supervisory readiness to ensure platforms meet capital-market standards before granting full licensure.”

New rules under the Investment and Securities Act (2025) classify digital assets as securities, bringing exchanges firmly under capital-market regulation.

Digital Asset Intermediaries (DAIs) and Digital Asset Platform Operators (DAPOs) now require a minimum capital of N500 million ($352,000). Combined services, including P2P trading, custody, or escrow, further increase regulatory obligations.

Quidax has also announced plans to delist 35 tokens, including meme coins, gaming assets, and tokens such as Worldcoin and World Liberty Financial. The company stated, “This adjustment aligns our platform with regulatory expectations and ensures safer trading for all users.”

The P2P shutdown represents the first clear wall for Nigeria’s crypto sandbox. Exchanges are now focusing on products that regulators can effectively monitor while maintaining liquidity and active trading for users in Nigeria’s developing crypto ecosystem.