The Nigerian Securities and Exchange Commission (SEC) has recently approved two local crypto exchanges, Busha Digital Limited and Quidax, under the Accelerated Regulatory Incubation Program (ARIP). This program was specifically designed to onboard firms before the forthcoming release of the Rules on Virtual Asset Service Providers in May 2022. By granting these approvals, the SEC aims to foster innovation while ensuring investor protection in the digital asset space.
According to the SEC, the Approval-in-Principle granted to Busha Digital Limited and Quidax is a precursor to full registration and is intended to establish appropriate protection and transparency for each product or service offered by these exchanges. Busha CEO Michael Adeyeri praised the approval as a necessary step to sanitize the crypto space for the benefit of the economy. He emphasized that this approval would enable Nigerian crypto users to access safe and regulated local platforms for managing and trading crypto-assets.
The approval of these local exchanges comes at a time when Nigerian authorities are cracking down on global platforms like Binance and OKX. Recent legal actions against Binance and the exit of OKX from the region due to non-compliance with local regulations highlight the regulators’ increasing vigilance. In addition to Busha Digital Limited and Quidax, five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program to evaluate business models and test innovative products in a controlled environment.
Among the firms registered under the RI program are Trovotech, a blockchain platform, Wrapped CBDC, a Nigerian stablecoin provider, HousingExchange.NG, a real-estate token platform, Dream City Capital, a digital real-estate investment firm, and Blockvault Custodian, a custodial service provider. The SEC reiterated that the ARIP and RI programs serve as the legitimate channels for well-intentioned entities to introduce their products to the Nigerian capital market.
The approval of Busha Digital Limited and Quidax by the Nigerian SEC signifies a shift towards embracing local crypto exchanges while maintaining regulatory oversight. These developments not only pave the way for innovation in the digital asset space but also establish a framework for investor protection and market transparency. As the crypto industry continues to evolve, collaboration between regulators and industry players will be crucial in ensuring a balanced and sustainable ecosystem in Nigeria’s growing digital economy.
