SEC Expands Digital Asset Sandbox, Granting Luno and Six Others Approval-in-Principle
The Securities and Exchange Commission (SEC) has significantly expanded its regulatory oversight of Nigeria’s burgeoning digital asset sector, admitting seven new companies into its Accelerated Regulatory Incubation Programme (ARIP). This move, which includes prominent crypto exchange Luno, signals a concerted effort by the Nigerian regulator to formalise and supervise the digital asset industry under controlled conditions.
The seven entities granted Approval-in-Principle (AIP) are Bitbarter Technologies Limited, Luno Fintech Nigeria Limited, GetEquity Limited, Koinkoin Global Network Limited, Wrapped CBDC Ltd, Trovotech Ltd, and Blockvault Custodian Ltd. According to a statement issued by the SEC, this AIP signifies that each company has met the programme’s admission criteria, allowing them to operate within the sandbox’s defined scope, subject to ongoing regulatory and supervisory obligations. It is crucial to note, however, that this approval does not constitute a final operating licence.
This latest cohort follows the SEC’s earlier admission of Quidax and Busha into its regulatory framework in August 2024, underscoring the Commission’s commitment to fostering responsible innovation while safeguarding investor interests and maintaining market integrity. The SEC emphasised that the AIP is conditional upon the entities’ continued adherence to all applicable regulatory, operational, and supervisory requirements.
Luno, a key player in the Nigerian crypto market since 2015, welcomed the development, describing it as a significant milestone in its regulatory journey. The company stated that the approval provides a clearer regulatory pathway as it seeks to expand its operations and offerings in Nigeria. Ayotunde Alabi, Luno Nigeria Chief Executive Officer, highlighted the approval as a strong validation of their commitment to responsible development in one of Africa’s most important cryptocurrency markets. He anticipates that this will enhance engagement with customers and institutional partners, while also supporting the expansion into business-to-business (B2B) services, including digital asset infrastructure, stablecoin applications, treasury solutions, and crypto-as-a-service products. Luno noted the increasing importance of regulatory clarity for financial institutions, fintechs, payment providers, asset managers, and corporate organisations exploring digital asset services.
The Accelerated Regulatory Incubation Programme serves as the SEC’s regulatory sandbox, designed to expedite the onboarding of digital asset service providers and other investment service providers. This framework allows the Commission to assess emerging technologies and business models under supervision, ensuring investor protection and market integrity before the issuance of full operational licences. This initiative is a critical component of the SEC’s broader strategy to establish a structured regulatory environment for virtual asset service providers in Nigeria, addressing years of sector uncertainty. Nigeria continues to be a leading cryptocurrency market in Africa, with substantial retail adoption despite periods of regulatory ambiguity.
In parallel developments, the World Bank has approved a new $1.25 billion loan for Nigeria under its Nigeria Actions for Investment and Jobs Acceleration (NAIJA) programme. This funding is part of a new Country Partnership Framework (CPF) for Nigeria covering 2026–2032, aimed at promoting private sector-led growth and job creation. The World Bank stated that the framework builds on Nigeria’s recent macroeconomic reforms, which have reportedly strengthened economic growth, improved government revenue, increased external reserves, and boosted investor confidence. The planned reforms supported by this facility include expanding capital markets, modernising regulations for the digital economy and e-governance, accelerating electricity sector reforms, reducing trade barriers in line with ECOWAS and AfCFTA commitments, improving access to quality agricultural seeds, and strengthening domestic revenue mobilisation.
However, concerns regarding Nigeria’s fiscal transparency have been raised by the International Monetary Fund (IMF). The IMF disclosed that approximately two per cent of Nigeria’s Gross Domestic Product (GDP), estimated at N8.83 trillion, was omitted from recent official budget documents. This practice of off-budget expenditure, which can obscure the true size of government deficits and debt accumulation, distorts economic data and complicates coordination between fiscal and monetary authorities. Christian Ebeke, resident representative of the IMF in Nigeria, highlighted that these unreported expenditures, largely attributed to capital projects executed outside the formal budget framework, should be reflected in fiscal accounts for a more accurate representation of public finances. The IMF stressed that improving fiscal transparency is critical for effective oversight and public accountability, although it acknowledged the government’s steps towards legislative reforms to address this issue.
