The Nigerian Securities and Exchange Commission (SEC) has granted two local crypto exchanges Busha Digital Limited and Quidax “Approval-in-Principle” to begin operations under the Accelerated Regulatory Incubation Program (ARIP), according to an Aug. 29 statement.
ARIP was specifically designed to onboard operational firms before the May 2022 release of the Rules on Virtual Asset Service Providers.
So, these approvals represent the SEC’s ongoing efforts to foster innovation while ensuring investor protection within the digital asset space. The regulator stated:
“The referenced Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are meant to ensure that appropriate protection and transparency is in place in respect of each product or service.”
Busha CEO Michael Adeyeri stated that the approval was “an overdue step to sanitize the space for the benefit of the economy.” He noted that the approval would allow Nigerian crypto users to access “safe and moderated local venues for managing and trading crypto-assets.”
The local exchange licensing comes as the authorities are clamping down on global exchanges like Binance and OKX.
Over the past months, the Nigerian government has filed legal actions against the Binance exchange and also forced OKX to exit the region due to non-compliance with local regulations.
Other licensed firms
The financial regulator also announced that five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program.
The RI Program is designed to evaluate the business models of digital asset firms and test innovative products in a controlled environment.
The firms registered under this program include blockchain platform Trovotech, Nigerian stablecoin provider Wrapped CBDC, and real-estate token platform HousingExchange.NG. Others are digital real-estate investment firm Dream City Capital and custodial service provider Blockvault Custodian.
The SEC reiterated that its ARIP and RI programs are the only legitimate avenues for “well-intentioned entities” to introduce their products to the Nigerian capital market. It added:
“The public is strongly advised to refrain from dealing with illegal operators who have not applied to and received the SEC’s approval under the ARIP or the RI Program”