The Nigerian Securities and Exchange Commission (SEC) recently granted Approval-in-Principle to two local crypto exchanges, Busha Digital Limited and Quidax, allowing them to operate under the Accelerated Regulatory Incubation Program (ARIP). This marks a significant step towards regulating the digital asset space in Nigeria and ensuring investor protection.
The approval of Busha Digital Limited and Quidax under the ARIP demonstrates the SEC’s commitment to fostering innovation while maintaining transparency and security within the crypto industry. By providing a framework for operational firms to comply with regulations before the official release of the Rules on Virtual Asset Service Providers in May 2022, the SEC is setting the stage for a more regulated and controlled environment for crypto trading.
Busha CEO Michael Adeyeri welcomed the approval as a positive step towards sanitizing the crypto space for the benefit of the economy. He emphasized that local exchanges like Busha and Quidax would provide Nigerian users with safe and regulated platforms for managing and trading crypto-assets, reducing the reliance on global exchanges that may not comply with local regulations.
The approval of local exchanges comes at a time when Nigerian authorities are cracking down on global exchanges such as Binance and OKX. Legal actions have been taken against Binance, while OKX was forced to exit the region due to non-compliance with regulations. This shift towards supporting local exchanges highlights the government’s efforts to regulate the crypto industry and protect investors from potential risks.
In addition to Busha and Quidax, five other firms have been admitted under Nigeria’s Regulatory Incubation (RI) program. These firms, including Trovotech, Wrapped CBDC, HousingExchange.NG, Dream City Capital, and Blockvault Custodian, will undergo evaluations of their business models and test innovative products in a controlled environment. The SEC reiterated that the ARIP and RI programs are the only legitimate avenues for well-intentioned entities to introduce their products to the Nigerian capital market.
The SEC’s approval of local crypto exchanges and the expansion of the Regulatory Incubation Program signal a new era of regulation and oversight in the Nigerian crypto industry. By providing a framework for compliance and transparency, the SEC aims to protect investors and promote responsible innovation within the digital asset space.