The Nigerian Securities and Exchange Commission (SEC) recently announced the granting of “Approval-in-Principle” to two local crypto exchanges, Busha Digital Limited and Quidax, allowing them to begin operations under the Accelerated Regulatory Incubation Program (ARIP). This program was established to facilitate the onboarding of operational firms in preparation for the release of the Rules on Virtual Asset Service Providers in May 2022. By granting these approvals, the SEC is demonstrating its commitment to promoting innovation while safeguarding investor interests in the digital asset space.
According to the regulator, the Approvals-in-Principle serve as a preliminary step towards the full registration of these exchanges with the SEC. The objective is to ensure that adequate measures for protection and transparency are in place for each product or service offered by the exchanges. Busha CEO Michael Adeyeri welcomed the approval as a necessary measure to “sanitize the space for the benefit of the economy.” He emphasized that the approval would enable Nigerian crypto users to access secure and regulated local platforms for managing and trading crypto-assets.
Local Exchange Licensing Amidst Regulatory Scrutiny
The approval of Busha and Quidax comes at a time when Nigerian authorities are increasing their oversight of global exchanges such as Binance and OKX. In recent months, the government has taken legal actions against Binance and compelled OKX to cease operations in the region due to compliance issues with local regulations. Concurrently, the SEC disclosed the admission of five other firms under Nigeria’s Regulatory Incubation (RI) program. This initiative is intended to evaluate the business models of digital asset firms and pilot innovative products within a controlled environment.
The firms enrolled in the RI Program encompass a range of services, including blockchain platforms, stablecoin providers, real-estate token platforms, digital asset investment firms, and custodial service providers. Among the participants are Trovotech, Wrapped CBDC, HousingExchange.NG, Dream City Capital, and Blockvault Custodian. The SEC reiterated that the ARIP and RI programs serve as the designated channels for “well-intentioned entities” to introduce their products to the Nigerian capital market, underscoring the regulatory commitment to fostering a diverse and sustainable crypto ecosystem in the country.
The approval of Busha and Quidax by the Nigerian SEC signals a pivotal moment in the evolution of the crypto industry in the country. As regulatory scrutiny intensifies and global exchanges face compliance challenges, local players are poised to play a more significant role in shaping the future of digital asset trading in Nigeria. Through programs like ARIP and RI, the SEC is paving the way for innovation and investor protection in the dynamic landscape of cryptocurrencies.