The Nigerian Securities and Exchange Commission (SEC) has allowed two local crypto exchanges Busha Digital Limited and Quidax “Approval-in-Principle” to commence operations under the Accelerated Regulatory Incubation Program (ARIP), according to an August 29 statement.
ARIP is specifically designed to get operating companies on board ahead of the May 2022 release of the rules for virtual asset service providers.
Thus, these approvals represent the SEC’s continued efforts to promote innovation while ensuring investor protection within the digital asset space. The regulator stated:
“The said Approvals-in-Principle are a precursor to the grant of full registration by the SEC and are intended to ensure that there are appropriate protections and transparency with respect to any product or service.”
Michael Adeyeri, CEO of Busha, stated that the approval was “a late step to clear the space for the benefit of the economy.” He noted that the approval would give Nigerian crypto users access to “safe and moderated local venues for managing and trading crypto assets.”
The local exchange licenses come as authorities restrict global exchanges such as Binance and OKX.
In recent months, the Nigerian government has taken legal action against the Binance exchange and also forced OKX to leave the region for failing to comply with local regulations.
Other recognized companies
The financial regulator also announced that five other companies have been accepted into the Nigerian Regulatory Incubation (RI) program.
The RI program is designed to evaluate the business models of digital asset companies and test innovative products in a controlled environment.
The companies registered under this program include blockchain platform Trovotech, Nigerian stablecoin provider Wrapped CBDC and real estate token platform HousingExchange.NG. Others include digital real estate investment firm Dream City Capital and custodial services 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 into the Nigerian capital market. It added:
“The public is strongly advised to refrain from doing business with illegal operators who have not filed with the SEC and received approval under the ARIP or RI programs”