The Nigerian Securities and Exchange Commission (SEC) has recently granted two local crypto exchanges, Busha Digital Limited and Quidax, “Approval-in-Principle” to commence operations under the Accelerated Regulatory Incubation Program (ARIP). These approvals are part of the SEC’s efforts to promote innovation while ensuring investor protection within the digital asset space. The ARIP was designed to onboard operational firms ahead of the May 2022 release of the Rules on Virtual Asset Service Providers.
The SEC emphasized that the Approval-in-Principle granted to the two exchanges is a precursor to full registration by the commission. It is aimed at ensuring that adequate protection and transparency are in place for each product or service offered by these platforms. Busha CEO, Michael Adeyeri, welcomed the approval as a necessary step to sanitize the space for the benefit of the economy. He highlighted that this approval would provide Nigerian crypto users with secure and regulated local venues for managing and trading crypto-assets.
The approval of these local exchanges comes at a time when Nigerian authorities are cracking down on global exchanges such as Binance and OKX. The Nigerian government has taken legal actions against Binance and compelled OKX to exit the region due to non-compliance with local regulations. In contrast, the SEC has admitted five other firms under Nigeria’s Regulatory Incubation (RI) program. This program is designed to assess the business models of digital asset firms and test innovative products in a controlled environment.
The firms that have been registered under the RI program include blockchain platform Trovotech, Nigerian stablecoin provider Wrapped CBDC, real-estate token platform HousingExchange.NG, digital real-estate investment firm Dream City Capital, and custodial service provider Blockvault Custodian. The SEC reiterated that its ARIP and RI programs are the only legitimate avenues for “well-intentioned entities” to introduce their products to the Nigerian capital market. These programs serve as a gateway for digital asset firms to establish their operations in a regulated and transparent manner.
The Nigerian Securities and Exchange Commission is taking proactive steps to accommodate the growing digital asset industry in the country while ensuring that regulatory standards are met. The approval of local exchanges and the admission of diverse firms under the regulatory programs demonstrate the SEC’s commitment to fostering innovation in a secure and supervised environment.