The Securities and Exchange Commission (SEC) of Nigeria has granted “approval-in-principle” to two digital asset exchanges, Busha Digital Limited and Quidax Technologies Limited, allowing them to commence operations under the Accelerated Regulatory Incubation Programme (ARIP).
This move is part of the SEC’s broader effort to regulate and support the burgeoning digital asset market, particularly in response to the rising adoption of cryptocurrencies among Nigeria’s youth.
In a statement released on Thursday, the SEC detailed that the ARIP will involve various cohorts, starting with two digital asset exchanges, four digital asset offering platforms, and one digital asset custodian. The goal of this programme is to strategically onboard and assess firms that had begun operations before the release of the SEC’s rules on virtual asset service providers in May 2022.
Busha Digital Limited operates a platform that enables the buying and selling of cryptocurrencies with fiat currency, providing users in Nigeria and other developing economies with basic digital asset investment services. Through its mobile and web applications, Busha allows customers to buy, sell, store, send, receive, trade, invest, and make payments using cryptocurrencies.
Quidax Technologies Limited, the second firm approved under ARIP, offers a cryptocurrency trading platform that leverages blockchain technology to list and trade pre-issued crypto tokens. The platform is accessible via both web and mobile applications, and it also provides digital wallets for storing, receiving, and transacting in a variety of cryptocurrencies.
The SEC emphasized that these approvals are preliminary steps towards full registration, ensuring that the firms operate with the necessary protection and transparency for consumers. The commission also disclosed that five additional firms have been admitted to the ARIP to test their business models and technology under close SEC supervision.
The SEC’s initiative reflects a cautious yet progressive approach to regulating digital assets, with a focus on consumer protection and market integrity. The outcome of the ARIP and the Regulatory Incubation (RI) programme will inform future policy development in Nigeria’s digital asset sector.
Furthermore, the SEC reiterated that only entities approved under ARIP and RI are legally authorized to engage in crypto trading in Nigeria, urging the public to avoid illegal operators.
The commission advised potential investors to verify the legitimacy of service providers before engaging in any digital asset transactions.
This regulatory effort comes at a time when Nigeria is experiencing significant growth in the use of digital assets, and the SEC’s actions are seen as crucial to safeguarding both the market and investors.