On Thursday, the Securities and Exchange Commission (SEC) granted Approval-in-Principle to two Digital Asset Exchanges, officially inducting them into the Accelerated Regulatory Incubation Program (ARIP).
The exchanges, Busha Digital Limited and Quidax Technologies Limited, facilitate the buying and selling of cryptocurrencies.
The SEC also welcomed five additional firms into the Regulatory Incubation (RI) Program, which allows them to test their business models and technological innovations under close supervision.
The ARIP was launched by the SEC to integrate firms that began operations before the Rules on Virtual Asset Service Providers were released in May 2022.
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The RI Program, in contrast, evaluates the business models of digital asset firms, enabling them to trial new products, services, and technologies in a controlled, real-time market environment.
Both the ARIP and RI Programs currently emphasize the growing use of distributed ledger technology (DLT) in the creation and trading of crypto assets.
“Millions of Nigerian crypto enthusiasts and users deserve safe and moderated local venues for managing and trading crypto-assets, and this is an overdue step to sanitise the space for the benefit of the economy, in line with global expectations,” Busha CEO Michael Adeyeri posted on X.
Quidax CEO Buchi Okoro confirmed the development on X, noting that Quidax operates a cryptocurrency trading platform using proprietary blockchain technology to list and trade crypto tokens.
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Busha provides digital asset investment services to users in Nigeria and other developing economies.
The five firms admitted to the Regulatory Incubation (RI) Program cover diverse areas of the digital asset ecosystem. Trovotech Ltd has created a blockchain platform for trading tokenized real-world assets like housing and infrastructure.
Wrapped CBDC Ltd plans to launch a Nigerian stablecoin pegged 1:1 to the naira for local and international crypto payments. HousingExhange.NG Ltd aims to help property developers raise capital through tokenization, while Dream City Capital provides a platform for digital real estate investments.
Blockvault offers custodial services for secure digital asset storage and management.
The SEC highlighted that these approvals are preliminary steps toward full registration, ensuring that consumer protections and transparency measures are in place.
It reiterated that only approved exchanges and platforms are legally authorized to operate in Nigeria and urged the public to avoid unauthorized entities.
This marks a significant shift in the SEC’s approach to cryptocurrency licensing.
Despite previous resistance from Nigerian authorities, the country remains a leading player in global cryptocurrency trading.
The Central Bank of Nigeria (CBN) recently lifted a two-year ban on cryptocurrency-related banking transactions, signaling potential changes in the regulatory landscape.
Concerns about peer-to-peer (P2P) trading’s impact on foreign exchange market volatility were also noted.
In May 2024, SEC Director General Emomotimi Agama met with crypto industry leaders to stress the need for exchanges to delist the naira from P2P trading, aiming to stabilize the local currency and enhance oversight of crypto transactions.
