The Nigerian Securities and Exchange Commission (SEC) recently granted Approval-in-Principle to two local crypto exchanges, Busha Digital Limited and Quidax. This approval falls under the Accelerated Regulatory Incubation Program (ARIP), created to onboard operational firms before the release of the Rules on Virtual Asset Service Providers in May 2022. The SEC’s decision to grant these approvals demonstrates a commitment to fostering innovation while ensuring investor protection in the digital asset space.
Benefits for the Economy
Busha CEO Michael Adeyeri expressed that the approval was a necessary step to cleanse the cryptocurrency space for the benefit of the Nigerian economy. He highlighted that the approval would provide Nigerian crypto users with access to secure and regulated local platforms for managing and trading crypto-assets. This move is significant as it establishes a framework for safe and transparent crypto exchanges in the country.
The approval of local crypto exchanges comes in the context of Nigerian authorities cracking down on global exchanges like Binance and OKX. The government has taken legal actions against Binance and forced OKX to exit the region due to non-compliance with local regulations. This regulatory action underscores the importance of working within the framework established by the SEC to operate legally in Nigeria’s crypto market.
In addition to Busha and Quidax, five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program. This initiative aims to evaluate the business models of digital asset firms and test innovative products in a controlled environment. The firms admitted under this 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 the ARIP and RI programs are the only legitimate avenues for well-intentioned entities to introduce their products to the Nigerian capital market.
The SEC’s approval of local crypto exchanges and the expansion of the Regulatory Incubation Program signal a positive step towards regulating and fostering innovation in Nigeria’s digital asset space. By providing a framework for safe and transparent crypto trading platforms, the SEC aims to protect investors while promoting growth in the cryptocurrency market. It is essential for crypto firms to adhere to regulatory guidelines to ensure long-term sustainability and legitimacy in the evolving landscape of digital assets.
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