Nigeria’s Securities and Exchange Commission (SEC) has granted an Approval-in-Principle to two crypto exchanges Quidax and Busha, giving them the status of legally recognised crypto trading platforms in the country.
SEC announced the development via a statement on Thursday, August 29, 2024.
The approval comes as part of the SEC’s Accelerated Regulatory Incubation Program (ARIP), a new initiative designed to provide a structured framework for digital asset companies to operate under strict regulatory oversight.
The move marks a major step forward in the formalization and regulation of digital assets within Nigeria.
The two firms, Busha Digital Limited and Quidax Technologies Limited, are well-established names in the Nigerian cryptocurrency space.
With the approval, they are now authorized to offer cryptocurrency trading and related services to the public, under close supervision by the SEC.
The “approval-in-principle” allows the companies to begin operations and further develop their platforms while undergoing rigorous evaluations to ensure full compliance with regulatory standards.
The SEC emphasized that this preliminary endorsement is a critical step in fostering innovation while ensuring investor protection and market integrity.
The SEC’s ARIP is designed to balance the need for innovation with the necessity of maintaining a secure and transparent financial ecosystem.
The successful implementation of the ARIP could pave the way for more digital asset companies to enter the Nigerian market.
It would be recalled that the SEC introduced the ARIP to strategically on-board firms that had commenced operations prior to the release of the Rules on Virtual Asset Service Providers in May 2022.
This was in response to several calls by stakeholders on the need to regulate crypto trading in the country.
Conversely, the RI Program was created to assess the business models of Digital Assets firms and test innovative products, services, and technology in a real-time market environment under close supervision by the SEC.
The SEC said the first set of companies approved are to test its regulatory model, adding that the outcome of the process would inform further policy development in the crypto space in Nigeria.
Despite the negative posture of the Nigerian authorities to crypto trading, many Nigerians have continued to transact with digital assets.
Several reports on global crypto trading have recognised Nigeria as one of the top countries trading in cryptocurrencies all over the world.
Meanwhile, stakeholders in the blockchain space in Nigeria have blamed the recent controversy that surrounded the operations of crypto exchanges and the alleged manipulation of the Nigerian currency through peer-to-peer (P2P) crypto trading on the policies and actions of the Central Bank of Nigeria (CBN), which tends to distance the regulator from the market.
According to them, the stance of the banking regulator opened the doors for bad actors, who were involved in currency manipulation through crypto trading.
The activities of the bad actors are believed to be denting the image of several legitimate players in the industry.
