The Securities and Exchange Commission (SEC) of Nigeria has granted Approval-in-Principle to two cryptocurrency exchanges, Quidax Technologies Ltd. and Busha Digital Ltd., officially recognizing them as legal crypto trading platforms in the country. These approvals were issued under the SEC’s Accelerated Regulatory Incubation Program (ARIP), a move aimed at fostering regulatory compliance within the rapidly evolving crypto sector.
According to the SEC spokesperson, Efe Ebelo, the approval-in-principle marks a significant step in the Commission’s commitment to enabling innovation that deepens the capital market while ensuring investor protection. She noted that this approval is a precursor to full registration, aimed at guaranteeing transparency and appropriate consumer safeguards.
Busha and Quidax Platforms
Busha operates a digital exchange that facilitates the buying and selling of crypto assets with fiat currency, allowing individuals and businesses in Nigeria and other developing economies to access basic digital asset investment services. Quidax Technologies, on the other hand, operates a cryptocurrency trading platform that leverages blockchain technology to list and trade already issued crypto tokens. Both platforms offer web and mobile-enabled services, providing users with ease of access and the ability to store, receive, and transact in various cryptocurrencies.
Regulatory Incubation Program (RI)
In addition to approving Quidax and Busha, the SEC has admitted four companies—Trovotech Ltd., Wrapped CBDC Ltd., Dream City Capital, and HousingExhange.NG Ltd.—into its Regulatory Incubation (RI) Program. This program allows these firms to test their business models and technological innovations in a real-time market environment under the close supervision of the SEC. The Commission emphasized that these companies, alongside those in ARIP, are pioneering the use of distributed ledger technology (DLT) in creating and trading crypto assets, and their performance will inform future regulatory policies.
Legal Recognition and Public Advisory
The SEC reiterated that only approved digital exchanges and platforms are legally authorized to operate as crypto trading entities in Nigeria. The Commission used this opportunity to caution the public against dealing with unlicensed operators and advised intending investors to always confirm the legitimacy of service providers through the SEC’s information portals.
Ebelo also noted that the SEC continues to assess other applications for the ARIP and RI programs and will grant Approval-in-Principle on a case-by-case basis as entities meet all SEC requirements. The Commission emphasized that ARIP and RI remain the only legitimate avenues for introducing digital products and services into the Nigerian capital market.
The introduction of ARIP by the SEC was a strategic response to calls from stakeholders for the regulation of crypto trading in Nigeria, particularly for firms that had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022. The Regulatory Incubation Program, on the other hand, was created to evaluate the business models of digital asset firms and test innovative products and services in a controlled environment. The outcomes from these programs will be critical in shaping further policy development within Nigeria’s crypto space.
Despite the challenges posed by the regulatory environment, Nigeria remains one of the top countries globally for cryptocurrency trading. However, recent controversies around currency manipulation via peer-to-peer (P2P) crypto trading have highlighted the need for effective regulation. Stakeholders in the blockchain sector have criticized the Central Bank of Nigeria’s (CBN) stance, arguing that it has inadvertently allowed bad actors to exploit the market, thereby tarnishing the reputation of legitimate industry players.
The SEC’s latest actions reflect a deliberate effort to bring structure and legitimacy to Nigeria’s burgeoning crypto industry, ensuring that both innovation and investor protection are adequately balanced.
Credit: NAN (Text Excluding Headline)
